February 24, 2023
As businesses have migrated to the cloud in recent years, many have discovered that they are paying exorbitant fees for services that they do not require. To save money, some businesses are considering relocating their data to on-premises servers.
According to CTO David Heinemeier Hansson, spending $600,000 on servers and more to have them hosted will save SaaS project management firm 37Signals over $7 million. He explained that $2.3 million of the cloud bill was spent on “app servers, cache servers, database servers, search servers, and the like.” Hansson plans to replace cloud servers with eight servers in each datacenter “running dual 64-core CPUs (for a total of 256 vCPUs per box!) or 14 machines running single-core CPUs at a higher clock frequency.”
Hansson also stated that 2,000 vCPUs per datacenter will cost approximately $600,000, but that these costs will be incurred over a five-year period. Although he claims it is now resolved thanks to hosting company Deft, he claims that when he factored in those fees, his back-of-the-envelope calculations yielded annual costs of $840,000 – compared to annual cloud compute costs of $2.3 million.
Aside from cost savings, having control over its own infrastructure gives it greater peace of mind and allows it to be more responsive to customer needs. However, repatriation is not appropriate for every business. For some, the flexibility and ease of use of the cloud are too valuable to forego. Those who have overspent on cloud services, on the other hand, should consider bringing some or all of their data back in-house.
“In round numbers, let’s call it saving a million and a half dollars per year.” Next, he tossed an extra half a million dollars into his budget to cover unforeseen expenses over the period, and still found a projected seven million dollars of savings over five years.
The sources for this piece include an article in TheRegister.
