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  1. #1
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    Thumbs up AWS keeps lowering costs!

    Just got a newsletter from AWS today that S3 and EBS storage pricing are sliced down starting Feb 1, 2014.

    This is an awesome news for us as we use AWS to store tons of data, this news just bring our operational cost into half, making our profit margin double.

    We'll wait until it goes down into 1 cent per GB, that would be even better.

    Kuddos to the guys at AWS!
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  2. #2
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    Others are increasing but AWS is different :-)

    Nice!
    Specially 4 You
    .
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  3. #3
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    Quote Originally Posted by net View Post
    Others are increasing but AWS is different :-)

    Nice!
    AWS is still extremely overpriced; their margin's are huge.
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  4. #4
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    Quote Originally Posted by Encrypted View Post
    AWS is still extremely overpriced; their margin's are huge.
    With AWS you're paying for a solution that works, run by a company that has millions in the bank to weather any storm. The price needs to cover their massive dev team which constantly rolls out new features. AWS doesn't have any competitors that have the security, features, and stability combined with their massive capacity.

    Getting a vps from tomdickorharryhost.com is not the same as spinning up 1,000 instances on aws.
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  5. #5
    Quote Originally Posted by gordonrp View Post
    With AWS you're paying for a solution that works, run by a company that has millions in the bank to weather any storm. The price needs to cover their massive dev team which constantly rolls out new features. AWS doesn't have any competitors that have the security, features, and stability combined with their massive capacity.

    Getting a vps from tomdickorharryhost.com is not the same as spinning up 1,000 instances on aws.
    Doesn't change the fact it's extremely overpriced. You can quite easily colocate some dedicated servers and get much better pricing and performance than AWS offers.

    The only real advantage AWS has over this is sheer ease and scalability. Which is great in some circumstances, but probably not necessary for most so I tend to recommend against AWS as a first option.
    Last edited by bazfrank; 01-21-2014 at 09:32 PM.

  6. #6
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    Google also low price on their platform of Google Compute Engine

    The date of this announcement was on December 2, 2013.

    Full information in:

    http://googlecloudplatform.blogspot....available.html

  7. #7
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    Quote Originally Posted by gordonrp View Post
    With AWS you're paying for a solution that works, run by a company that has millions in the bank to weather any storm. The price needs to cover their massive dev team which constantly rolls out new features. AWS doesn't have any competitors that have the security, features, and stability combined with their massive capacity.

    Getting a vps from tomdickorharryhost.com is not the same as spinning up 1,000 instances on aws.
    I'm aware of what's going on behind the scenes. We're about ~2 months from launching a competing service and our pricing is going to be about 1/3 of AWS. They have huge margins because they're one of the few players in the market.. we'll see how long that lasts.
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  8. #8
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    Quote Originally Posted by net View Post
    Others are increasing but AWS is different :-)
    Yes, others are moving towards charging the actual amount providing a service costs, but AWS is still running on a 200% markup :p
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  9. #9
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    They can afford to do that with the recent $600 million government contract.

  10. #10
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    Quote Originally Posted by bazfrank View Post
    Doesn't change the fact it's extremely overpriced. You can quite easily colocate some dedicated servers and get much better pricing and performance than AWS offers.

    The only real advantage AWS has over this is sheer ease and scalability. Which is great in some circumstances, but probably not necessary for most so I tend to recommend against AWS as a first option.
    You are on drugs if you think that is cheaper. Colo requires agreements 2 to 5 years upfront and unless you are willing to pay allot you donīt get good bandwidth deals. Its per commitment as opposed to Amazon where you pay what you use.

    Also, in colo you need to pay your own hardware, not to mention its crap after 1 year with 50% devaluation, and then you have hands of servers for everything which goes from 50$ to 150$ per hour depending on the datacenter. A failed disk? Out of luck. Your switch has problems, out of luck. Dos attack, out of luck.

    You can have better prices if you are willing to invest a small fortune, as opposed to amazon where I can get it, right now. Yes, this means in 60 seconds.

    How exactly are you comparing your solution to them? You are comparing a solution which requires agreements upfront, heavy upfront costs and heavy maintenance costs to something available with simple clicks.

    Its really nice how people say Amazon is overpriced because they envy them. If this was the case, why donīt they compete with them?

    Amazon is dirty cheap and at this step it will sadly leave allot of providers out of business.

  11. #11
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    Quote Originally Posted by astutiumRob View Post
    Yes, others are moving towards charging the actual amount providing a service costs, but AWS is still running on a 200% markup :p

    How would you even know that? Unless you have the financial sheets from Amazon where it lists everything from the floor leasing per feet in the datacenter, hardware replacements, etc, you will never know how much markup they have. Its all based on pure speculation.

  12. #12
    Quote Originally Posted by nibb View Post
    You are on drugs if you think that is cheaper. Colo requires agreements 2 to 5 years upfront and unless you are willing to pay allot you donīt get good bandwidth deals. Its per commitment as opposed to Amazon where you pay what you use.
    The one consuming foreign substances is indeed in question if you think colocation requires 2 to 5 year contracts as your only option for any scale of deployment.
    Many colocation providers that I have worked with will gladly colo anything you want from single 1U server on a monthly basis to full racks. So I'm not sure I have any idea what you're talking about here. You are talking about making deals for colocation that would be required for much larger data center space allocations. If you use that kind of resources on Amazon, then for sure it would be much cheaper to colocate. The advantage to Amazon is being able to spike resources, not much an advantage when you are dealing with expected resource needs.

    Quote Originally Posted by nibb View Post
    Also, in colo you need to pay your own hardware, not to mention its crap after 1 year with 50% devaluation, and then you have hands of servers for everything which goes from 50$ to 150$ per hour depending on the datacenter. A failed disk? Out of luck. Your switch has problems, out of luck. Dos attack, out of luck.
    The things that matter are not advancing fast enough for that much of an issue after only a single year. Look at the most recent Intel CPU update for example, a performance increase of only a few percent.

    Yes, you need to buy hardware, but go ahead and spec out a decent server's configuration cost - then compare this to the same spec on Amazon. Just look at how much it costs for the high memory nodes for example(since we seem to like being super specific with examples).

    You can probably spec out a server with 72 GB of RAM that'll pay itself off within a few months at most without issue. Hell, if you look around a bit you can find servers with 72 GB of ram ready to go for under $1200. Less than one month's cost. This is why I say Amazon is too expensive still.

    I can then take that box and colocate it on gigabit and get much cheaper bandwidth pricing then on Amazon. Want to use a single instance on a gigabit link fully for a month on Amazon, then you are talking over 10k alone. For under 2k I could own a colocated server for a month with dedicated gigabit. The next month after that you are talking half the price. You think Amazon is cheaper - show me how. That's a lot of money to replace.

    A disk failure is not necessarily catastrophic. A good RAID configuration will keep you going until you can swap the disk out. Not only that, but with just a few servers, assuming you're configured for proper distribution, you can simply have automated tools designed to fall back to other servers if there are problems. You'll already have to do this sort of thing if you're using EC2 to spin up more nodes or such anyways.

    DDoS is a problem regardless of where you are, Amazon or otherwise, yes, you can spin up more nodes, but as long as your provider is co-operative DDoS solutions are not usually a big problem. You are saying Amazon will solve all your dos problems, yet your website is also running behind Cloudflare. Don't get me wrong, I think Cloudflare is awesome, but I am unsure why you think Amazon will save you from the problem scale of dos that you seem to be implying without throwing large amounts of funds in their direction.

    Quote Originally Posted by nibb View Post
    You can have better prices if you are willing to invest a small fortune, as opposed to amazon where I can get it, right now. Yes, this means in 60 seconds.
    I won't deny that this is an advantage - but I'm not sure it's an important one in most situations. It's an advantage for very large sites which may see regular traffic spikes, but that's about the end of it. It's easy to do this - I'll give you that. But like I showed before, you're paying for it to the tune of thousands of dollars per month on Amazon.

    Quote Originally Posted by nibb View Post
    How exactly are you comparing your solution to them? You are comparing a solution which requires agreements upfront, heavy upfront costs and heavy maintenance costs to something available with simple clicks.

    Its really nice how people say Amazon is overpriced because they envy them. If this was the case, why donīt they compete with them?

    Amazon is dirty cheap and at this step it will sadly leave allot of providers out of business.
    I do not offer colocation, I do not offer any sort of service which competes with Amazon. I'm simply speaking out of my own experience using both Amazon EC2 on small instances (and examining the cost of larger ones) and comparing that with small-medium scale colocation providers. Envy does not factor into this. There are many options where Amazon could be a good choice when you are spiking, other than that the alternatives are a much cheaper and an equally good if not better solution.
    Last edited by bazfrank; 01-26-2014 at 02:55 AM.

  13. #13
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    Quote Originally Posted by bazfrank View Post
    The one consuming foreign substances is indeed in question if you think colocation requires 2 to 5 year contracts as your only option for any scale of deployment.
    Many colocation providers that I have worked with will gladly colo anything you want from single 1U server on a monthly basis to full racks. So I'm not sure I have any idea what you're talking about here. You are talking about making deals for colocation that would be required for much larger data center space allocations. If you use that kind of resources on Amazon, then for sure it would be much cheaper to colocate. The advantage to Amazon is being able to spike resources, not much an advantage when you are dealing with expected resource needs.



    The things that matter are not advancing fast enough for that much of an issue after only a single year. Look at the most recent Intel CPU update for example, a performance increase of only a few percent.

    Yes, you need to buy hardware, but go ahead and spec out a decent server's configuration cost - then compare this to the same spec on Amazon. Just look at how much it costs for the high memory nodes for example(since we seem to like being super specific with examples).

    You can probably spec out a server with 72 GB of RAM that'll pay itself off within a few months at most without issue. Hell, if you look around a bit you can find servers with 72 GB of ram ready to go for under $1200. Less than one month's cost. This is why I say Amazon is too expensive still.

    I can then take that box and colocate it on gigabit and get much cheaper bandwidth pricing then on Amazon. Want to use a single instance on a gigabit link fully for a month on Amazon, then you are talking over 10k alone. For under 2k I could own a colocated server for a month with dedicated gigabit. The next month after that you are talking half the price. You think Amazon is cheaper - show me how. That's a lot of money to replace.

    A disk failure is not necessarily catastrophic. A good RAID configuration will keep you going until you can swap the disk out. Not only that, but with just a few servers, assuming you're configured for proper distribution, you can simply have automated tools designed to fall back to other servers if there are problems. You'll already have to do this sort of thing if you're using EC2 to spin up more nodes or such anyways.

    DDoS is a problem regardless of where you are, Amazon or otherwise, yes, you can spin up more nodes, but as long as your provider is co-operative DDoS solutions are not usually a big problem. You are saying Amazon will solve all your dos problems, yet your website is also running behind Cloudflare. Don't get me wrong, I think Cloudflare is awesome, but I am unsure why you think Amazon will save you from the problem scale of dos that you seem to be implying without throwing large amounts of funds in their direction.



    I won't deny that this is an advantage - but I'm not sure it's an important one in most situations. It's an advantage for very large sites which may see regular traffic spikes, but that's about the end of it. It's easy to do this - I'll give you that. But like I showed before, you're paying for it to the tune of thousands of dollars per month on Amazon.



    I do not offer colocation, I do not offer any sort of service which competes with Amazon. I'm simply speaking out of my own experience using both Amazon EC2 on small instances (and examining the cost of larger ones) and comparing that with small-medium scale colocation providers. Envy does not factor into this. There are many options where Amazon could be a good choice when you are spiking, other than that the alternatives are a much cheaper and an equally good if not better solution.
    You said colo was cheaper than Amazon, how exactly is what you posted cheaper? Getting a 1 U unit in colo with a short agreement is even more expensive for the simple reason that the bigger your agreement with the facility is the better your prices are going to work out. This is true for almost anything related to business.

    You pointed out it was cheaper to Colo, and I said it was not, colo is cheaper if you are going to invest big, otherwise Amazon will be a better deal.

    Colo is cheaper if you are going the big way and then its usually for prolonged usage, hosting companies, etc. If you happen to need 10 servers now, and only for 2 months, Amazon will be cheaper.

    If you need one single server, depending on what you look, it will be still cheaper than buying a server and putting it in 1U. And if you happen to have low requirements, colo also not be the best way either. You are going to get a better deal leasing a server or getting VPS than trying to colo single units.

    With Amazon you donīt even deal with hardware at all and that is a cost factor as well. I donīt say Amazon is the cheapest way to do something, but it surely fits allot of different usage models and scenarios.

    Where are you getting those 72 GB rams server ready to go for 1200$? Only the ECC ram sticks alone cost that.

    Amazon is a cloud provider, cloud is not supposed to be used for "permanent" stuff this is why the storage is destroyed in Amazon. Yes, its so popular now that people use it as permanent solution but if you need something that you are going to use for years, then getting a leased servers is cheaper. The idea of the cloud was to be able to scale and burst for as long as you want without having the hardware in place. And with Amazon I can spin up 1000 servers today without having them just for a couple of hours and finish a lab research in hours instead of months.

    Also, Amazon is supposed to earn money with their cloud as well, of course they need to earn something on top of their services. You are comparing a solution which is messy, requires allot of experience in IT, hardware, network, etc, with something I can click and launch. Of course it will be more expensive if you go the easy route as they did all the dirty job for you already. Its ready to go and time costs money, some companies and users canīt bother to waste time getting into colo or fixing things if they break.
    Last edited by nibb; 01-26-2014 at 05:11 AM.

  14. #14
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    Its odd, all these hosting companies think AWS is expensive via the isolating the comparison to say hardware or bandwidth, you'd think at 200% you wouldnt see AWS enjoying growth month by month, these companies must be stupid: netflix, pinterest, airbnb, reddit, foursquare, spotify, shazam, $600m government contract, remaining half+ of all YComb or other incubators, or maybe they havent reach the scale yet where its a good idea (tm) to move away from AWS. And heck AWS has had its share of outages so its not like they havent had to contend with negative points
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  15. #15
    Quote Originally Posted by MattF View Post
    Its odd, all these hosting companies think AWS is expensive via the isolating the comparison to say hardware or bandwidth, you'd think at 200% you wouldnt see AWS enjoying growth month by month, these companies must be stupid: netflix, pinterest, airbnb, reddit, foursquare, spotify, shazam, $600m government contract, remaining half+ of all YComb or other incubators, or maybe they havent reach the scale yet where its a good idea (tm) to move away from AWS. And heck AWS has had its share of outages so its not like they havent had to contend with negative points
    Actually, I was basically saying the opposite. AWS is very good if you have to deal with spikes and very large services like (at least some of) your examples use it just for this reason.

    However, in cases the case of small-medium sized services, where you have fairly low costs and fairly small spikes it can be quite a bit cheaper to use colocation and you can have more powerful constant hardware vs what you'd have on Amazon unless you wanted to pay far more. This is also the case with large services with fairly constant service requirements.

  16. #16
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    Are you comparing onDemand pricing vs Colo or are you actually taking into account Reserve pricing? Last I looked, the spread isn't that unreasonably wide if you actually do the apples-apples comparisons. Capital depreciation and IT overhead ate pretty much into any difference for me as I don't discount the cost of my time nor the risk exposure of having one large single point of failure.

  17. #17
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    Quote Originally Posted by bazfrank View Post
    Actually, I was basically saying the opposite. AWS is very good if you have to deal with spikes and very large services like (at least some of) your examples use it just for this reason.

    However, in cases the case of small-medium sized services, where you have fairly low costs and fairly small spikes it can be quite a bit cheaper to use colocation and you can have more powerful constant hardware vs what you'd have on Amazon unless you wanted to pay far more. This is also the case with large services with fairly constant service requirements.
    You are forgetting this about S3:

    "Amazon S3 redundantly stores your objects on multiple devices across multiple facilities in an Amazon S3 Region."

    So you would need a few colos to do same thing

    I'm using S3 for backup and because my data is pretty small, I have very small costs. That's what makes it perfect for me.

  18. #18
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    Quote Originally Posted by Encrypted View Post
    I'm aware of what's going on behind the scenes. We're about ~2 months from launching a competing service and our pricing is going to be about 1/3 of AWS. They have huge margins because they're one of the few players in the market.. we'll see how long that lasts.
    Competing compute or what? Half the popularity is the other services, not just the servers. They are far from one of the "few" players. But their popularity is high because their the only name in town in terms of proven scale.

    If you're building a service with AWS as a target, you're doing it wrong. The vast majority of AWS customers don't even think there is a competitor to AWS and likely would only choose Rackspace or Google. The big boys.
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  19. #19
    On AWS, your per unit cost keeps going down as you use more - S3 pricing drops from 9.5c/GB to 5.5c/GB while traffic pricing drops from 12c/GB to 5c/GB. As your usage increases above certain levels, hourly rates as well as the upfront costs of reserved instances go down by as much as 20%. These numbers are from the AWS website - I will be surprised if large customers are not offered an even better deal.

    Spot instances are a good option for organizations which need lots of computing power for offline / batch jobs - think video encoding etc. They can also be used in real time at large scale if sufficient engineering effort is spent in building an architecture which uses hundreds / thousands of Spot Instances and automatically spins up regular instances if the spot prices increase too much.

    There is definitely an argument for AWS being expensive for smaller organizations with fairly constant workloads. As an example, my company has rented a few dozen dozen servers from two dedicated server vendors and all our data is mirrored. One set of servers is on standby in case something goes wrong with the primary servers. These standby servers are also used by us for running the occassional batch job. It costs us about a third of what AWS would, even after assuming that AWS is very reliable and does not need hot spares. There is no doubt that it would have been a lot easier to get it done on AWS but the money we save is substantial and worth the extra effort, at least for us.

  20. #20
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    Quote Originally Posted by x86brandon View Post
    Competing compute or what? Half the popularity is the other services, not just the servers. They are far from one of the "few" players. But their popularity is high because their the only name in town in terms of proven scale.

    If you're building a service with AWS as a target, you're doing it wrong. The vast majority of AWS customers don't even think there is a competitor to AWS and likely would only choose Rackspace or Google. The big boys.
    I like how you quoted 'few'. Hehe. The rest is aimed at @Encrypted

    Just for clarity, the top-tier cloud industry is actually quite crowded. Outside of the big four (which also includes Microsoft), there's HP cloud, Joyent, GoGrid, Terremark, Softlayer, AT&T. Pricing spread is narrow at least at the plain pay-as-you-go pricing. Differentiation occurs at utilization rates which sometimes actually puts you cheaper than low-tier cloud providers.

    The margin is nice at PayG, but really that's due to economies of scale. The infrastructure and ongoing maintenance costs tend to be the first thing that gets skimped on going down the cloud tiers. If your market target are those people who choose AWS because that's what they heard the big boys use, then sure, cut corners and get that 1/3 pricing. Digital Ocean is proof that the AWS fish pond is diverse enough. But then, you're not really competing against AWS - you're competing against Digital Ocean. Sadly, that doesn't have the same marketing oompfh.

  21. #21
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    Quote Originally Posted by nikhil500 View Post
    On AWS, your per unit cost keeps going down as you use more - S3 pricing drops from 9.5c/GB to 5.5c/GB while traffic pricing drops from 12c/GB to 5c/GB. As your usage increases above certain levels, hourly rates as well as the upfront costs of reserved instances go down by as much as 20%. These numbers are from the AWS website - I will be surprised if large customers are not offered an even better deal.
    @nikhil500, related to reserve instances, you actually might be interested in cloudability.com. I've seen it do some pretty good smart analysis on hourly time buckets to see which Reserve Instance slots you should buy. Useful if you've got bursty traffic that's causing instance counts to fluctuate.

    I saw their presentation at reInvent 2013 and was kinda taken aback by how much juice you can squeeze out of AWS pricing (and I thought I had a handle on the pricing structure - man was i wrong).

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