Basecamp-Maker 37Signals Says Its 'Cloud Exit' Will Save It $10 Million Over 5 Years (arstechnica.com) 35
An anonymous reader quotes a report from Ars Technica: 37Signals is not a company that makes its policy or management decisions quietly. The productivity software company was an avowedly Mac-centric shop until Apple's move to kill home screen web apps (or Progressive Web Apps, or PWAs) led the firm and its very-public-facing co-founder, David Heinemeier Hansson, to declare a "Return to Windows," followed by a stew of Windows/Mac/Linux. The company waged a public battle with Apple over its App Store subscription policies, and the resulting outcry helped nudge Apple a bit. 37Signals has maintained an active blog for years, its co-founders and employees have written numerous business advice books, and its blog and social media posts regularly hit the front pages of Hacker News.
So when 37Signals decided to pull its seven cloud-based apps off Amazon Web Services in the fall of 2022, it didn't do so quietly or without details. Back then, Hansson described his firm as paying "an at times almost absurd premium" for defense against "wild swings or towering peaks in usage." In early 2023, Hansson wrote that 37Signals expected to save $7 million over five years by buying more than $600,000 worth of Dell server gear and hosting its own apps.
Late last week, Hansson had an update: it's more like $10 million (and, he told the BBC, more like $800,000 in gear). By squeezing more hardware into existing racks and power allowances, estimating seven years' life for that hardware, and eventually transferring its 10 petabytes of S3 storage into a dual-DC Pure Storage flash array, 37Signals expects to save money, run faster, and have more storage available. "The motto of the 2010s and early 2020s -- all-cloud, everything, all the time -- seems to finally have peaked," Hansson writes. "And thank heavens for that!" He adds the caveat that companies with "enormous fluctuations in load," and those in early or uncertain stages, still have a place in the cloud.
So when 37Signals decided to pull its seven cloud-based apps off Amazon Web Services in the fall of 2022, it didn't do so quietly or without details. Back then, Hansson described his firm as paying "an at times almost absurd premium" for defense against "wild swings or towering peaks in usage." In early 2023, Hansson wrote that 37Signals expected to save $7 million over five years by buying more than $600,000 worth of Dell server gear and hosting its own apps.
Late last week, Hansson had an update: it's more like $10 million (and, he told the BBC, more like $800,000 in gear). By squeezing more hardware into existing racks and power allowances, estimating seven years' life for that hardware, and eventually transferring its 10 petabytes of S3 storage into a dual-DC Pure Storage flash array, 37Signals expects to save money, run faster, and have more storage available. "The motto of the 2010s and early 2020s -- all-cloud, everything, all the time -- seems to finally have peaked," Hansson writes. "And thank heavens for that!" He adds the caveat that companies with "enormous fluctuations in load," and those in early or uncertain stages, still have a place in the cloud.
Why did this take them 10 years to figure out? (Score:5, Interesting)
We already knew the cloud was just an easy but expensive solution for startups or an expensive way to temporarily scale out one's infra.
Re:Why did this take them 10 years to figure out? (Score:5, Insightful)
It's one of those things that "everyone knows" but no-one really knows. In our case (small obscure company) all it took was some bored geek sitting down and pricing out what a cloud version would cost once you went past the kiddie-level joke stuff (1 CPU, 2GB RAM, almost no disk space) and how rapidly the graph climbed after that, vs. the cost of a second-hand Dell server or two and half a day to set it up, and it was a complete no-brainer.
But most companies who aren't run by geeks won't know that, and in particular anyone who's used to spraying around hundreds or even thousands of VMs (most of them obsolete, idle, or forgotten) and duct-taping the services on them together to achieve the aggregate performance of a 386 on the equivalent of a farm of Cray supercomputers, just thinks that's the way things are done, and you can't convince them otherwise.
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The cloud makes sense if you don't have a mature IT department. You're basically just outsourcing your IT work to the cloud provider until you can grow your own IT department, which doesn't happen overnight. And yeah, you'll spend a lot more on cloud services, period.
The same can be said for applications as well. It's even harder to build an internal application development team than an IT department, but if you do you'll save a crapload on licensing costs in the long run. The reason it's usually harder is
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It was a small company (not really a start up), and it did well. This was pre-cloud
Post-cloud, guess what.... we still have servers on prem. We still run clusters, and data warehouses, and high speed computes.
They looked at cloud solution over VMWare, 1 million a year for cloud on our then, current config. It doesnt even compare, and I think thats why broadcom raised their price on VMWare, to make c
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It's one of those things that "everyone knows" but no-one really knows. In our case (small obscure company) all it took was some bored geek sitting down and pricing out what a cloud version would cost once you went past the kiddie-level joke stuff (1 CPU, 2GB RAM, almost no disk space) and how rapidly the graph climbed after that, vs. the cost of a second-hand Dell server or two and half a day to set it up, and it was a complete no-brainer.
It wasn't such a no-brainer back in 2015 when the "migrate everythin
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True. In our case we did the maths only a few years back when it came time to replace some of our servers, and the question was go cloud or keep it in-house. If we'd done it in the time frame you mention, before the cloud providers had had time to optimise their setup to squeeze very possible cent out of their customers, we may well have gone to the cloud and now be stuck there.
As an aside, it's amazing the level of performance you can get for knock-down prices from servers only a few years old that some
Re:Why did this take them 10 years to figure out? (Score:4, Insightful)
Meanwhile in the public sector, we're still ripping shit out and putting it in 'the cloud'. I'm not a manager. I don't know what the reasoning is, I suspect it's so they can not hire and tell insurance they're in cybersecurity compliance. We have one in particular who does not understand that it doesn't matter how secure your shit is if no one can use it.
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Considerations for
Re: Why did this take them 10 years to figure out? (Score:2)
The cloud is considerably more than just VMs and organisations that only use AWS or Azure in the same way as they use a datacentre are obviously going to run up a huge bill. The costs of that aren't hidden. Anyone however that takes full advantage of the resources available is going to have a much better experience.
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Hosting your own stuff requires an entire department of bearded grumpy people that speak a language that no one understands. If your C-Level is tech adverse, it's hard to swallow AND to manage correctly. And if you outsource everything, it's probably a bad idea. So there is still a place in the cloud for companies that don't want to touch tech with a 10 foot pole.
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We already knew the cloud was just an easy but expensive solution for startups or an expensive way to temporarily scale out one's infra.
There is another case, which is what's mentioned in the article. "companies with 'enormous fluctuations in load,'" and this kind of generalizes as "if you can avoid running things completely for large amounts of time". That's true of normal load scaling applications and it's especially true of AWS's Lambda system or other similar FaaS systems in the right case. If you have your own servers, you end up paying at least for the servers and the space that you need for peak capacity. If you switch them all off t
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If your company sells, for example, tickets on the internet and a typical pattern is that you have to scale up a particular chosen application in response to a TV News segment that mentions something (think Taylor Swift's next concert) then running your application on the right cloud system can let you scale up to 100,000 times your typical application needs within minutes or even seconds, stay at that scale for 1/2 an hour, make massive massive sales and basically justify the entire existence of your company and then scale down again immediately the load goes away and perhaps never get to that scale ever again.
TICKETMASTER! They are the WORST!
They'll internally price-out the costs to scale; they'll only half-ass the scaling of some services (usually administrative side) without actually supporting the client-side breadth of services; they'll charge end-users exorbitant service fees; and they'll eventually wind-down those half-ass scaled services.
So much so that they'll literally never scale again for the duration of a performer's ticket selling efforts. And the best part? They'll also charge the performer fo
I am a psychic (Score:2)
Progressive Web Apps (Score:5, Insightful)
Also known to those of my generation as "the mainframe model":
- You don't own what you pay for
- The software vendor changes whatever they want willy-nilly and if you don't like it, tough cookie
- When the software vendor fucks up and introduces bugs or vulnerabilities, you can't hold off the upgrade until it's fixed
- If you have a problem and you're a small company, customer service is nonexistent or insulting at best because you're not worth the software vendor's time
- The software vendor can charge you repeatedly whatever they want in perpetuity because you don't buy a license, you buy a subscription
When the personal computer came about, we couldn't get enough of it: finally computers would be yanked out of the greedy hands of IBM and the likes and we'd be free to do what we want on our own term. Finally!
And now we're right back where we started. The more things change, the more they stay the same...
Re: Progressive Web Apps (Score:2)
Re: (Score:2, Troll)
Trolls need to eat too!
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And their favorite food is shit.
I was CTO of a company when it got sold. (Score:2)
The new board wanted everything in the cloud. We went from 10k a year to 800k. And still had the same staffing.
I'd be the first one to tell you (Score:2)
When my latest client wanted the SAAS I was writing to be hosted on Amazon or Microsoft cloud, I wasn't too happy. It would have been cheaper for me to co-locate a couple of servers in data centers, but they were adamant about it. So I doubled my hosting cost and hosted a virtual instance on Amazon. Yes, it costs more than any server I would have put together, but ...
1) I made the client pay for it
2) I don't have to worry about hardware issues
3) I don't have to worry about unauthorized, physical access t
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7) they don't need to worry about training their staff in your environment if they ever decide to take it over
8) they get a whole bunch of security stuff such as a repository for recording and validating software artefacts in to protect against supply chain attacks more or less for free
9) whatever security auditing work they have already done for their other applications also applies to your application..
And on and on. At the same time, doing your own hosting also has a bunch of benefits beyond cost
1) there
Cloud is for startups (Score:2)
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I've worked for an undisclosed world-wide food processing machines company for years, and it seems a perfect example on how to make bad decisions in IT.
The good thing was connecting all the different brand companies with one international network. After that there was migrating to terminal servers for branch offfices (at my local company) which only had a meager few MB bandwidth ADSL connection, made worse by giving everyone who whined enough a laptop instead of a terminal client.
Then came the centralisatio
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And now they're busy moving all ERP to one instance of SAP (aka Sandlaufer Anschau Programm), complete with missing functionalities, more slowdown, and even higher costs.
Actually, it's Sanduhr Anzeige Programm (Sandglass Display Program).
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Ahh, thanks.
I heard the term from a co-worker who had frequent contact with the German IT side. Seems his language dictionary wasn't that good after all (I did see the term I used on a couple of Dutch pages).
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The real news is... (Score:2)
... that AWS is even more expensive than Pure Storage? Wow!
Clexit? (Score:1, Offtopic)
remove the "ex" and shorten it to four letters.
Company plays lift-and-shift (Score:3)
Surprised to discover that it's more expensive.
This is pretty much EVERY failed cloud journey in a nutshell and provides significant evidence 37Signals shouldn't be viewed as techxperts on cloud. Ever.
I am permanently surprised that Azure remains cheaper than on-prem despite all the accounts of how expensive cloud is. Then again, proper prep and planning meant we didn't just build big, stupidly expensive, VMs in the cloud. SaaS offers significant value. Storage is a damned site cheaper and requires zero maintenance . Visibility and service offering to business is signficantly improved with no need to force business through gateways or, even worse, VPNs.
That being said, pretty sure one of the internal AWS teams announced a year or so ago that they dropped AWS micro-services because of the cost. They were not wrong. The value propisition there is negative all the way.
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> I am permanently surprised that Azure remains cheaper than on-prem despite all the accounts of how expensive cloud is.
Are you talking about Azure VMs? They are not cheaper than on-prem even for very reasonably sized systems. They are quite a bit more expensive. I know, I used to run our servers on Azure.
My company was renting our servers from an ISP in Arizona. It was stupid expensive. We move to Azure and our costs dropped to 1/3rd. We did it again and moved to OVH and our cost went down to 1/3r
What was the point of moving to the Cloud again (Score:2)
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What was the point of moving to the Cloud again
Versatility. Deployment. Scalability. Security. Visibility. Access. Manageability. Automation. Redundancy. Disaster Recovery.
The list of benefits is long.
Not having to manage hardware rotation, connection redundancy, maintenance, energy and staffing is a pretty big selling point as well.
But then, you already knew that. Right?
The cloud is the proverbial basket (Score:2)
People who maintain on-premise hardware. (Score:2)