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How Amazon Keeps Cutting AWS Prices: Cheapskate Culture

timothy posted about 4 months ago | from the mining-the-couch-for-change dept.

Businesses 146

An anonymous reader writes "Amazon Web Services has cut its prices on 40-plus consecutive occasions, at times leading the charge, at other times countering similar moves by Microsoft and Google. This article at CRN includes some interesting behind-the-scenes trivia about how Amazon keeps costs down, including some interesting speculation — for example, that perhaps the reason Amazon's Glacier storage is so cheap is that maybe it might be based at least partly on tape, not disk (Amazon would not comment). The article also explains that the company will only pay for its employees to fly Economy, and that includes its senior executives. If they feel the need to upgrade to Business or First Class, they must do so from their own pocket. And instead of buying hardware from an OEM vendor, AWS sources its own components – everything from processors to disk drives to memory and network cards — and uses contract manufacturing to put together its machines."

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Business class is a misnomer (5, Informative)

Anonymous Coward | about 4 months ago | (#46756259)

Unless you work in finance, oil/gas or certain luxury markets and have money to burn you're flying economy no matter what industry you're in. It's not being cheap, it's being smart. You're stil going to get to the same place at the same time as the other passengers.

Re:Business class is a misnomer (4, Informative)

Anonymous Coward | about 4 months ago | (#46756271)

Some people do not enjoy travel and upgrading them is one way to encourage them to do it more often.

Re:Business class is a misnomer (1)

rtaylor (70602) | about 4 months ago | (#46758049)

That is the airlines problem.

The more workarounds a person finds for not travelling (calls, emails, etc.) the less the cost to the ticket buying company; assuming they manage to keep productivity the same.

Re:Business class is a misnomer (1)

fermion (181285) | about 4 months ago | (#46758315)

Some people don't enjoy work and paying them more might get them to work on time or to work the whole day. Or you could just fire them and hire someone who has an understanding that they have agreed to do a job for a rate of pay.

Re:Business class is a misnomer (1)

K. S. Kyosuke (729550) | about 4 months ago | (#46758487)

To be frank with you, I like me not enjoying travel and wouldn't consent to anyone trying to upgrade me with a travel-enjoying brain module.

Re:Business class is a misnomer (0)

Anonymous Coward | about 4 months ago | (#46758817)

Or they could say, "travel or you're fired". You know, like how they'd do any other peon in the company that isn't white collar. Honestly, if a person hates traveling so much and wants to, on their own dime, upgrade, then I don't see a reason for the company to resist. But this idea that you have to incentivize things for white collar workers seems ridiculous. It'd be different if it were something of a random morale thing or some other equally applied rule. But the idea that people can just complain and get better treatment...

Re:Business class is a misnomer (0)

Anonymous Coward | about 4 months ago | (#46756293)

Unless you work in finance, oil/gas or certain luxury markets and have money to burn you're flying economy no matter what industry you're in. It's not being cheap, it's being smart. You're stil going to get to the same place at the same time as the other passengers.

Not always; often international long-haul flights (that are unbearable if you are flying alone in coach) are done business-class for even the plebs that work for tech companies, otherwise you would never convince your employees it's worth it to work with BCC teams. Domestically, yes, no sane company will put you in business/first by default unless they just had money gushing from every seam. However, travel enough and the free upgrades become plentiful (with certain airlines).

Re:Business class is a misnomer (0)

Anonymous Coward | about 4 months ago | (#46756407)

You're stil going to get to the same place at the same time as the other passengers.

Albeit, for some people, with much sorer knees.

Re:Business class is a misnomer (5, Insightful)

wienerschnizzel (1409447) | about 4 months ago | (#46756469)

You're stil going to get to the same place at the same time as the other passengers.

Not in the same shape though.

It might not impact you much if you are going to one conference, but if you fly to multiple destinations within a week, it will build up. Your back/joint pain, stress level, lack of sleep will show. It might mean that you will save 5k on the boarding passes of your exec but then pay millions for the bad decision she makes.

Re:Business class is a misnomer (3, Insightful)

DuckDodgers (541817) | about 4 months ago | (#46758165)

Or lose her because she quits to work for a company that has less travel.

Re:Business class is a misnomer (0)

Anonymous Coward | about 4 months ago | (#46758297)

If you fly to multiple destinations per week, you probably have frequent flier status that gets you free upgrades anyway.

dom

Re:Business class is a misnomer (1)

quetwo (1203948) | about 4 months ago | (#46759653)

Yeah, good luck with that. They give more upgrades to monkeys that use their credit cards than they do people who travel often. As somebody who used to travel > 100k a year of domestic travel (plus international), those would barely qualify for an upgrade to super coach every so often given today's rates.

Re:Business class is a misnomer (2)

cryptizard (2629853) | about 4 months ago | (#46756471)

Yeah I was kind of thrown off by them using the loaded term cheapskate. I would call that efficiency or austerity. Everyone was complaining that they were assholes when companies were flying around in private jets while at the same time laying off employees. Now we complain that they are cheap if they make their employees fly in coach with the rest of us proles.

Re:Business class is a misnomer (1)

MikeTheGreat (34142) | about 4 months ago | (#46759677)

Three comments:
  1. 1) Companies don't fly around in jets, people do
  2. 2) People don't fly around in private jets, executives do
  3. 3) We're still calling those executives that fly around in private jets assholes

Re:Business class is a misnomer (1)

danbert8 (1024253) | about 4 months ago | (#46756481)

I work in the oil/gas industry, and the rule is you are flying economy unless the flight is over 8 hours. We have to negotiate with supervisors to spend extra money to take a direct flight instead of wasting hours on connections and layovers...

Re:Business class is a misnomer (1)

mapuche (41699) | about 4 months ago | (#46756693)

If you travel a lot for business there's a chance you have to fly for half a day or even more hours, sign a contract, shake hands and return home the same or next day. Using business class is the best way to arrive fresher for you meeting and make good decisions. For me doesn't make much sense to pay business for a less than 4-5 hours flight, but that's just me.

Re:Business class is a misnomer (1)

Triv (181010) | about 4 months ago | (#46758227)

Yeah, that's WAY more efficient than establishing the relationship in advance and just Fedexing the document back and forth once it requires a signature.

Re:Business class is a misnomer (1)

mccalli (323026) | about 4 months ago | (#46757461)

Smart for who? Not for the employee.

Unless flying regularly is clearly stated in your contract (and I mean regularly, not 'you may be asked to travel from time to time'), the company is inconveniencing you over and above your normal duties, and causing actual discomfort in the case of many economy flights. You ask for decent standards or refuse.

I'm astonished to see so many people defend this. For flights of two or three hours, fine. For anything longer - absolutely not.

Cheers,
Ian

Re:Business class is a misnomer (1)

epyT-R (613989) | about 4 months ago | (#46757609)

Try flying economy from the USA to china. If you expect your employee to be functional the moment they leave the airport on the other side, you'll fly them business at least.

Re:Business class is a misnomer (1)

Zeorge (1954266) | about 4 months ago | (#46758779)

Direct flight from Dulles to Tokyo (and back), only flew coach. That was on US Government sponsored travel. They don't care, it's simply cheaper. The only time I have heard of people flying business or above was if that was in the contract, and the customer missed that part. It's rare to find that now a days unless the ROI is high enough. But, you really need to look at those ticket prices to see what I am talking about. There is a quantifiable difference between a coach and first-class ticket. You can seriously buy a decent car for a first-class ticket to a far destination.

Re:Business class is a misnomer (2)

PPH (736903) | about 4 months ago | (#46757705)

It's not being cheap, it's being smart.

I used to fly a lot when I worked for Boeing (commercial, not gov't contract). We had an entire travel department that arranged trips and accomodtions. And they prided themselves on finding the cheapest (crappiest, that is) deals that they could. One time, when I had to fly from Seatle to New York, I just called travel and said, "You find me the flight that meets your cost requirements. I'll upgrade to first class out of my own pocket." They practicaly shit themselves. It wasn't about the cost, it was about the perception of being tight with a dollar. While actualy wasting buckets of money*.

One time when a group of us had to spend a week in Cincinnati, Boeing travel booked rooms at a flea-bag airport motel which was about 30 miles from the vendor we were working with. I fought that one and found a cheaper (and much nicer) extended stay motel a few miles from the vendor. From that point on, I was on the travel department's shit list.

*I suspect that certain members of the travel department get some frequent flyer miles in their own accounts for steering business toward certain airlines and hotel chains. And for missing the actual lowest cost deals when planning company trips.

Re:Business class is a misnomer (3, Insightful)

Pembers (250842) | about 4 months ago | (#46758069)

You're stil going to get to the same place at the same time as the other passengers.

True, but you have a nicer seat with more room, and everything before and after the flight runs faster and smoother. You have your own check-in desk and security line, so you can arrive at the airport an hour later than the economy-class passengers. You have a bigger baggage allowance, so you might not have to put anything in the hold - and if you do, it'll probably come off the plane first. All that can make the difference between a day trip and an overnight stay, or turn a trip of n days into n-1 days.

Re:Business class is a misnomer (1)

Anonymous Coward | about 4 months ago | (#46758209)

I feel that business class is very important for people that need to be able to fly somewhere and make a presentation or make business decisions on the same day as their arrival. Economy and business class will both get you there at the same time, but flying long-distance on economy is going to leave you mentally and physically fatigued--not good for business.

Re:Business class is a misnomer (1)

Anonymous Coward | about 4 months ago | (#46759915)

I fly about 4-6 legs a month. I have to sit in an aisle. For whatever reasons or how dumb that may sound to someone, it is what it is. I scope out flight times that I can get an aisle and I don't mind leaving early or later to get it. I almost always fly United and they have "Plus" seats. Not many people will pay the extra $29-79 to get those seats so they are usually still unfilled close to departure time. The advantage to me is my company will pay the difference for them as it is not billed as class upgrade and I almost always get my aisle seat.

Economy Class Only (5, Informative)

CohibaVancouver (864662) | about 4 months ago | (#46756281)

The requirement of 'no business class' for air travel isn't unique to Amazon. Every tech company I've worked for had the same policy - From the senior execs on down.

Thankfully, the company I work for now doesn't require red-eye flights. So I can arrive at a destination, sleep overnight in a hotel bed, then wake up the next morning and start working.

Re:Economy Class Only (1)

Anonymous Coward | about 4 months ago | (#46756349)

When I interviewed with Intel, I was told that they own (or maybe charter, I can't remember) their own planes to send people around. I thought it was cool, but they said they were often referred to as sardine cans. Tightly packed, very little space.

Re:Economy Class Only (4, Informative)

binarylarry (1338699) | about 4 months ago | (#46756371)

Little planes can also be scary as fuck.

Re:Economy Class Only (4, Informative)

bsane (148894) | about 4 months ago | (#46756505)

They have (had?) regular flights between their west coast locations, you just show up and take a seat. I don't know that they fly charter flights anywhere else on a regular basis. It also wasn't unique to Intel, HP used to do something very similar.

Re:Economy Class Only (5, Interesting)

Anonymous Coward | about 4 months ago | (#46756703)

I fly those planes regularly to get between Intel sites. The experience is infinitely better than commercial flights.
1) You go via smaller airports, or a separate terminal. No bilking for parking, stupid busses etc.
2) Walk in, wave your badge, get on plane. 5 minutes.
3) It's economy sizes seats, but they have a power socket.
4) Yes you do sit next to the execs.
5) You drop your bag on the trolley going out. It's on a trolly on the tarmac when you get out the other end
6) No one is going to steal expensive things from your bags.
7) No assigned seating. Get on, find a seat, sit down.
8) It costs Intel a lot less to fill its own plane than to pay commercial rates.

The downside is they are popular and so it's hard to get seats at short notice.

Re:Economy Class Only (4, Insightful)

BonThomme (239873) | about 4 months ago | (#46756533)

And I'm sure if you ever actually flew with one our your senior execs, you'd be mystified why you can't find them in the coach section...

Re:Economy Class Only (5, Informative)

CohibaVancouver (864662) | about 4 months ago | (#46757423)

And I'm sure if you ever actually flew with one our your senior execs, you'd be mystified why you can't find them in the coach section...

A couple of years ago I flew back from Mobile World Congress (Barcelona) in economy class. An Intel exec was seated next to me and an IBM exec was across the aisle.

Re:Economy Class Only (1)

PTBarnum (233319) | about 4 months ago | (#46757771)

Right, because they fly enough that they can get free uprades on almost every flight, or worst case they can afford to pay for the upgrade out of pocket.

Re:Economy Class Only (1)

schlachter (862210) | about 4 months ago | (#46756893)

I can see this for domestic flights, but I'd be pretty annoyed if it were true for international flights.

Re:Economy Class Only (0)

Anonymous Coward | about 4 months ago | (#46759217)

Coming up within 5 years (you can quote me):

Senior execs being required to use Airbnb if there is a couch to sleep on thats cheaper than a hotel room...

Re:Economy Class Only (1)

CohibaVancouver (864662) | about 4 months ago | (#46759383)

Senior execs being required to use Airbnb if there is a couch to sleep on thats cheaper than a hotel room..

Ridiculous things your company has done to reduce travel expenses:

http://www.flyertalk.com/forum... [flyertalk.com]

I have a different theory (2)

slashmydots (2189826) | about 4 months ago | (#46756285)

Or it's their unbelievable number of screw ups that ended up in downtime making people not respect them.

Re:I have a different theory (0)

Anonymous Coward | about 4 months ago | (#46756433)

All bytes are processed and sent by mechanical turks.

Fly Economy - tragic! (5, Insightful)

Overzeetop (214511) | about 4 months ago | (#46756287)

We're supposed to be surprised that everyone is supposed to fly coach?

And, if you're custom rolling your backend at the scale of AWS, I wouldn't expect anything *but* sourcing yourself. Outsourcing is for organizations that don't have the expertise in house and want a finger to point if things go wrong. Vertical integration is more cost efficient if you have the scale to make it work.

Re:Fly Economy - tragic! (1)

RyuuzakiTetsuya (195424) | about 4 months ago | (#46757559)

Flying from LA to Chicago or Seattle to Phoenix? Sure. Economy's just fine.

From NYC to Shanghai? Dallas to Rio? Anywhere to Honolulu or Juno?

More than 4 hours on a flight and pay the outrageous fees. your sanity will thank you for it.

Writers have no practical experience (1)

Zeorge (1954266) | about 4 months ago | (#46758847)

They can write, one even authors papers (whoo) but if they actually understood what they wrote about they'd realize what you had just said: no point in buying COTS when you are creating your own. You'll just waste money and time trying to get it to work. Just make it right the first time.

Cheapskate? (4, Interesting)

fuzzyfuzzyfungus (1223518) | about 4 months ago | (#46756305)

Doesn't 'cheapskate' have a somewhat perjorative connotation, either edging into 'stingy' (if talking about spending on socially normative things) or 'penny wise, pound foolish' (if talking about good sense in short and long term cost/benefit thinking)?

From what the article decribes, Amazon isn't so much 'cheapskate' as operating perfectly sensibly given their scale, cutting unnecessary (but usually bundled) components, and not giving in to poorly justified; but commonly assumed, habits like sending Important Employees to fly business class.

I can understand why they would be scaring their competitors pretty seriously; but I'm not sure that I see the 'cheapskate' bit.

Re:Cheapskate? (1)

mysterons (1472839) | about 4 months ago | (#46756355)

People here are forgetting the costs associated with flying senior (ie expensive) people around. There is an argument that if you are billing a client for three figure sums a day, you had better ensure that the person flying arrives in good shape so they can work straight from the flight. Sending people coach can be a false economy.

Re:Cheapskate? (0)

Anonymous Coward | about 4 months ago | (#46756519)

The place I work has a pretty decent policy on this. I'm based in the US. They say any flight over 6 hours you can upgrade. Of course, for all practical purposes, for US based workers, this means all trips within the continental US are economy. Pretty much all trips "overseas" for us are business class. Now, we are global, so people in say Singapore don't get business class when flying to Malaysia since it isn't even close to 6 hours, but in general for those of us in the US - cross an ocean, fly business class is the rule.

Re:Cheapskate? (1)

azadrozny (576352) | about 4 months ago | (#46757947)

I have seen many comments like this, but I think there are a lot of what-if scenarios to consider. Is it necessary for that person to work straight from the flight? It could be cheaper to fly them in the night before, and pay for an extra night in the hotel. Is this person expected to work while on the plane? If not, all that extra space mat not be necessary. How often is the person expected to travel? If this employee is hopping around the country, especially for a multi-city trip, perhaps the upgrade is warranted, since they may not be able to settle in at anyone location very long. In the end, I hate to see hard rules. A manager should have some discretion to adapt to the situation and the employee. At the same time, I consider upgrades like this a perk. An employee (executive or otherwise) should not expect to travel this way, and be prepared to justify the cost if they ask.

Re:Cheapskate? (2)

cusco (717999) | about 4 months ago | (#46756683)

I've noticed that one thing that they are NOT skimping on is security, either physical or network. No one gets anywhere in any facility worldwide without controls, even Chinese and US government officials. I'm actually quite impressed with their degree of organization and adherence to (generally well thought-out) policies.

Re:Cheapskate? (0)

Anonymous Coward | about 4 months ago | (#46756913)

TFA uses the term "frugal". And this is just one of many ways that costs are kept down.

Clearly whoever titled this has a beef with Amazon.

Re:Cheapskate? (2)

DuckDodgers (541817) | about 4 months ago | (#46758219)

Outrage gets more visitors, which increases ad revenue. So 'frugal' became 'cheapskate' for the sake of a few extra dollars. Welcome to the modern internet, where the people who aren't launching flamewars as fast as they can lose their business to those that do.

I've heard this somewhere before... (1)

Anonymous Coward | about 4 months ago | (#46756307)

Amazon, in its majestic equality, requires both code monkeys and senior executives to pay for their own upgrades.

Re:I've heard this somewhere before... (3, Insightful)

fuzzyfuzzyfungus (1223518) | about 4 months ago | (#46756345)

Amazon, in its majestic equality, requires both code monkeys and senior executives to pay for their own upgrades.

It beats the alternative of providing the upgrades for free to the people who can most easily afford them, in the service of maintaining a good, solid, hierarchy.

Re:I've heard this somewhere before... (1)

Anonymous Coward | about 4 months ago | (#46758021)

No kidding. With the army of plebes that Amazon has working under those execs, the internal politics PR value of making the same rules apply to C-level execs has massive benefits to share-holder value. Since those same execs get compensated at least partially according to share price, the productivity increase tied to the morale-boost of this policy likely buys more in stock dividends for the execs than the airline upgrades cost. That's just good business.

AWS is NOT cheap (5, Informative)

afidel (530433) | about 4 months ago | (#46756343)

AWS is expensive, I can provide the equivalent of an m3.large reserved instance to my users for 1/4th the cost over 3 years, if you ammatorize my infrastructure over 5 years (which is what we've actually been doing) then it's almost 1/7th as much. The only places where AWS makes sense is if you're a quickly growing startup, have a VERY bursty workload, or you're so small that you can't justify 3 hosts for a VMWare Essentials bundle.

Re:AWS is NOT cheap (2)

the_scoots (1595597) | about 4 months ago | (#46756363)

That's assuming everyone is paying the sticker price. Larger customers can negotiate better rates with Amazon.

Re:AWS is NOT cheap (2, Interesting)

Anonymous Coward | about 4 months ago | (#46756397)

Agreed, AWS is defintely not cheap by cloud standards. I recently did some cloud price comparisons and Amazon had, by far, the most expensive offerings. In some cases, where relatively small workloads were involved, services like Azure were half the price of AWS.

Re:AWS is NOT cheap (0)

Anonymous Coward | about 4 months ago | (#46756449)

>blah blah blah. 1/4th the cost blah blah blah
>VMWare
have you ever heard of Xen?

besides, somehow I doubt you can provide the same redundancy & scalability from a server in your parent's basement.

Re:AWS is NOT cheap (2)

afidel (530433) | about 4 months ago | (#46756509)

Yes, I've heard of Xen, and I've even run it in production, both Xenserver and Oracle VM flavors, and both sucked horribly. Back when VMWare tried the v.Tax I contemplated switching to KVM using RHEV but Redhat took almost 30 days to even get me access to a RHEV download by which time VMWare had backed off on their pricing.

As to the crack about redundancy and scalability, I've got a better uptime metric than any cloud provider, zero unplanned downtime in the last 5 years (vmotion + svmotion makes replacing both hosts and storage a breeze) thanks to redundant generators, UPS, chillers, and internet connections.

Re:AWS is NOT cheap (2)

RabidReindeer (2625839) | about 4 months ago | (#46756671)

Yes, I've heard of Xen, and I've even run it in production, both Xenserver and Oracle VM flavors, and both sucked horribly. Back when VMWare tried the v.Tax I contemplated switching to KVM using RHEV but Redhat took almost 30 days to even get me access to a RHEV download by which time VMWare had backed off on their pricing.

As to the crack about redundancy and scalability, I've got a better uptime metric than any cloud provider, zero unplanned downtime in the last 5 years (vmotion + svmotion makes replacing both hosts and storage a breeze) thanks to redundant generators, UPS, chillers, and internet connections.

There was a time when I ran Xen because a paravirtual VM ran MUCH faster than an VMWARE guest OS. Not so true these days and on modern hardware, but back then, the difference was immense.

Xen has always been reliable for me. The main problem was what it did to networking. And it added injury to insult by zapping the MAC addresses on my NICs on a routine basis.

Supposedly Xen4 fixes that. They make YOU do all the network setup. Which ordinarily I'd resent, but at least when magic elves aren't meddling around in the configuration, I have a much easier time of it.

And that goes for NetworkManager, too!

Re:AWS is NOT cheap (0)

Anonymous Coward | about 4 months ago | (#46758801)

I used to be work in a business that had one of the top 10 biggest Xen deployments in the US. After scalability issues and the need for Live Migration/vMotion, the place moved from Xen to one of the top two commercial VM servers.

Xen is OK, but you do get what you pay for, and you will be throwing man-hours getting it set up, and more man-hours keeping it maintained than you would with Hyper-V or ESXi. Personally, I'd rather pay the license fees (if using Windows, you have to buy the license for Hyper-V anyway), and use that solution for anything.

No license for Hyper-V (1)

FearTheDonut (2665569) | about 4 months ago | (#46759685)

Assuming you already own a Windows Server (or Windows 8 or greater), Hyper-V comes with your OS. Obviously you may have to purchase the OS that is going on your VM if you are installing a proprietary OS, but there's no explicit charge for Hyper-V anymore.

"Microsoft Hyper-V Server 2008 R2 is a stand-alone product that is available as a free download via the Microsoft Download Center. Hyper-V is a technology built into Windows Server 2008 R2. If you own Windows Server 2008 R2 then you already own Hyper-V. Find out more information on how to buy Windows Server 2008 R2."

Re:AWS is NOT cheap (5, Funny)

rebelwarlock (1319465) | about 4 months ago | (#46756491)

I also provide hosting. Give me money instead.

Fixed that for you.

Re:AWS is NOT cheap (1)

afidel (530433) | about 4 months ago | (#46756527)

LOL, only to internal customers =)

Re:AWS is NOT cheap (2)

cryptizard (2629853) | about 4 months ago | (#46756493)

There are a lot of workloads where it makes sense. If you are doing research and you only need to use a lot of computing resources for a few weeks out of the year to run simulations or something, then it is much more economical to go AWS than have a giant cluster sitting idle most of the time.

Re:AWS is NOT cheap (2)

cusco (717999) | about 4 months ago | (#46756751)

I don't doubt that **YOU** can provide the equivalent of x, y and z, but very few SMBs have that talent available. Is it worthwhile for a (for example) physicians' clinic to pay AWS, or cough up the money for staff/contractors to manage their cloud infrastructure? Hard call, and how many doctors can adequately judge whether the people that they're paying are competent?

Re:AWS is NOT cheap (0)

Anonymous Coward | about 4 months ago | (#46757203)

I can see AWS useful for a short term project (a month, or maybe a quarter)... but like the parent, if there is a project going on for a long time, it can be better to take it in-house.

1U x86 servers are not too expensive, especially if custom built. For the initial cost of a m3.large reserved, one can start off with a bare-bones server. Add the hourly time, and one can have a basic VMWare or Hyper-V infrastructure that can be hammered to the limits of the hardware 24/7 without worry about CPU/disk use. As an added bonus, one gets the benefit of physical security.

For bursts, AWS is useful, but long-term, the best buy is servers in-house. Plus, you will be communicating with them via core LAN links as opposed to over the edge WAN that is slower and can cost more.

Re:AWS is NOT cheap (1)

FearTheDonut (2665569) | about 4 months ago | (#46759717)

Don't forget the other savings you get for using AWS (or other cloud providers). Facilities (and associated maintenance), power costs (cloud centers are almost always more efficient), and hardware administration. Obviously, you have to run the numbers yourself, but remember it isn't JUST hardware costs that are saved by moving to a cloud.

Re:AWS is NOT cheap (1)

poached (1123673) | about 4 months ago | (#46758097)

That's great that your service is 1/4 the cost of AWS, but do you have a data center in Europe that I can run my apps on? How about South America, Asia Pacific? Yeah, it may cost more, but I get to have my apps and services running in all major geographies so that customer can actually have a good experience. Can you provide that kind of service at your current price point?

Re:AWS is NOT cheap (1)

DuckDodgers (541817) | about 4 months ago | (#46758337)

It's the scaling. If you have fixed resource requirements, set up your own servers in a good colocation somewhere. If you usually run with X server capacity but a few times a year or more you need 5X or 10X, go with AWS (or Google, Microsoft, Rackspace, DigitalOcean, etc.... )

Re:AWS is NOT cheap (1)

Slashdot Parent (995749) | about 4 months ago | (#46759917)

AWS is expensive, I can provide the equivalent of an m3.large

Oh, excellent! I need to analyze 5PB of data in a 1000 node Hadoop cluster, which I'll need for about a week. I'll need to start the analysis in 3 days. It's a bit of a last-minute rush job. What would you charge me for that?

What? You can't provide that infrastructure at any time at any price? Oh, rats. I guess I'll just have to use AWS.

Walmart on the web (2, Informative)

Anonymous Coward | about 4 months ago | (#46756395)

Amazon has always been about low costs. It's why I love them as a customer, but ran the other way after interviewing for a job there. Their offices (at least the ones I saw in a Seattle tower) were dirty and dingy. I'm kind of a neat freak, and don't like that kind of atmosphere at home, so I could not handle the idea of tolerating it every day at work.

Re:Walmart on the web (3, Funny)

wonkey_monkey (2592601) | about 4 months ago | (#46756459)

You do not want to know what I'm doing right now.

Re:Walmart on the web (1)

azadrozny (576352) | about 4 months ago | (#46757309)

Amazon is not doing anything new. Walmart has had this general philosophy for a long time. Good or bad, they have been squeezing every cent out of their supply chain, using the power of their distribution centers to keep their costs low. I recall reading somewhere that their CEO occupies the same modest office that Sam Walton used, and it does not get lavishly redecorated often (if ever). At least they are passing the savings on to the customer.

Re:Walmart on the web (2)

cusco (717999) | about 4 months ago | (#46759097)

Unlike Wally-world, Amazon is not fucking over its employees at every opportunity. Amazon employees make enough that they don't qualify for food stamps, much less need them to survive. Amazon employees have actual benefits. Amazon employees have actual insurance. Amazon doesn't take out 'dead peasant' life insurance policies on its employees either. Even the much-pitied fulfillment center temps are treated better than the best WalMart employee.

Business/First class is absurd (0)

Anonymous Coward | about 4 months ago | (#46756413)

I see zero reason why any company would pay for business or first class. It's like paying ten times the what it would otherwise cost, for...what, the chance to have 3 nips of something on the way? Good for Amazon for not flushing its money down the drain.

Re:Business/First class is absurd (1)

Virtucon (127420) | about 4 months ago | (#46756443)

It's the bigger seat and room you get in First/Business. Those make a difference if you have to fly long distances (7+ hours) week in and week out.
Try it sometime to see what I mean.

Re:Business/First class is absurd (0)

Anonymous Coward | about 4 months ago | (#46756513)

Is that what theytold you...naive...mhc...naive...

Re:Business/First class is absurd (1)

PPH (736903) | about 4 months ago | (#46757487)

Wider seats in first class. Sometimes business class is a rip-off (same seats, better snacks). But on long trips, first class seating is much more comfortable.

I could care less about leg room (I'm only 4' 18" tall). But I'm built like a tank and my arms hang into the aisle or across the shared armrest in economy class seating.

Re:Business/First class is absurd (1)

Amtrak (2430376) | about 4 months ago | (#46758537)

This is exactly it. My brother who is 6' 10" and built like a tank always pays to upgrade when he has to fly a long distance like to Europe. I however don't care I'm 5' 11" and pretty normally wide. (It's funny being normal sized in a big family BTW. I grew up thinking I was short.) I can suffer through coach just fine thank you very much. Though I have been known to jump on getting an exit row if the occupant doesn't want to/can't open the door.

Not being huge has other advantages as well. For example I have no problem driving a Mazda 3 with manual transmission. My brother has trouble getting his knee to fit under the dash while bringing his foot up to hit the clutch. Also in my sister's Chevy Cruz his head hits the ceiling every time you hit a bump. As a result he drives an Impala which he knows gets terrible gas millage compared to my Mazda but at least he's comfortable.

kill the jews (-1)

Anonymous Coward | about 4 months ago | (#46756441)

do it for the kids

Of course it is tape (5, Insightful)

cryptizard (2629853) | about 4 months ago | (#46756453)

perhaps the reason Amazon's Glacier storage is so cheap is that maybe it might be based at least partly on tape, not disk

That is one of the stupidest things I have ever read. Of course it is using tape, why else would it take up to 24 hours to get your data when you request it? Everyone knows that is the whole point of Glacier, and the reason they can offer it so cheap. Nobody wants to deal with the hassle of having their own offsite tape library, so Amazon will do it for you with a convenience user interface. That is literally exactly what all of AWS is based on, doing something cheaper for you because they have the expertise and the facilities at scale.

could be blueray (3, Interesting)

schlachter (862210) | about 4 months ago | (#46756937)

It could also be blueray disk based. Not as likely as tape based, but could be cheaper/faster at scale.

Re:could be blueray (0)

Anonymous Coward | about 4 months ago | (#46757845)

BD-R is not a reliable medium

Re:could be blueray (1)

DuckDodgers (541817) | about 4 months ago | (#46758421)

I used to use DVD-Rs for personal backups but unlike commercial DVDs, some of the disks started having read errors (despite very careful handling) after less than three years.

On the other hand, Amazon certainly has the resources to get whatever the hell it is the movie studios use to create the same Blu Ray disks you get when you buy Back to the Future on Blu Ray. I have yet to have a Blu Ray have a read error, and I've got a few dozen of them. So maybe Amazon uses that.

Re:could be blueray (1)

BaronAaron (658646) | about 4 months ago | (#46759777)

Commercial optical disks from movie studios are stamped.. Stamping disks requires costly equipment and setup time and only makes sense when you are going to make many copies of the same disk.

Writable optical disks often use organic dye which breaks down over time, especially when exposed to bright light. This is often why their shelf life is very bad.

There is no way Amazon is using either technology for this.

Re:could be blueray (2)

silas_moeckel (234313) | about 4 months ago | (#46758485)

Nor is it ever cheaper and it's rarely faster. A LTO 6 tape is 2.5 TB uncompressed at about 60 bucks A 50 pack of 25GB BD-R's is also about 60 bucks and writes at what 30MBs? You need 5 running in parallel to get nearly as fast as a single LTO drive. DB-R's are about the same price as a sata drive per GB your better off plugging them in as needed though neither is as reliable as tape in the long term.

Re:Of course it is tape (1)

PPH (736903) | about 4 months ago | (#46757391)

Yeh, but duct tape?

Subsidies (0)

Anonymous Coward | about 4 months ago | (#46756487)

It's able to afford this because they have been on a campaign of raising prices for the most popular items on Amazon.com for the last several months, increases as large as 30%.

Reluctantly, grudgingly, (-1, Offtopic)

140Mandak262Jamuna (970587) | about 4 months ago | (#46756757)

That is how I pay my taxes. But I do pay them.

I do not see taxation as theft, as many conservatives, libertarians claim.

I see government as a long term venture capitalist, who invests in the entire next generation of America. Some of them will strike it big, and others will strike out. If I am one of the fortunate group that was able to take full advantage of the investment the government made in me, investments that protected my earning potential and my property rights, then the tax I pay is just dividend to the venture capitalist.

So despite all the reluctance and the pain associated with parting with my money, I know it is the right thing to do. The government investment in the next generation depends on it. I can invest better on my children, and the government investment is creating competitors to my children. If I believed in Social Darwinism, I will fight taxes tooth and nail. But I believe human beings should rise above this level of self interest and pay the taxes.

Re:Reluctantly, grudgingly, (0)

140Mandak262Jamuna (970587) | about 4 months ago | (#46756769)

oops wrong thread.

Flight costs (0)

Anonymous Coward | about 4 months ago | (#46757019)

I think it is funny that Berkshire Hathaway also has this unwritten policy. Execs of business units know better than to fly anywhere first class.

FWIW: This is how it is where I work. The only exception is if you have a long flight. I think it is crazy though. Something like a 12 hour flight. Basically, fly to Australia I guess.

This sounds like an ad.. (2)

slashkitty (21637) | about 4 months ago | (#46757243)

AWS services are NOT cheap at all when compared to running dedicated servers. With a little bit of load balancing, you can have a much faster, more reliable, cluster for a fraction of the price. Currently, I rent quad core machines for about $60 a month. That works out to $0.08 / hour. AWS charges $0.56 for a comparable speed service. It's not just that they can lower prices, they have to to compete with the real world.

Re:This sounds like an ad.. (0)

Anonymous Coward | about 4 months ago | (#46758269)

I agree that virtualization and intelligent load balancing allows you to get more processors (translating into speed and failover/reliability); but without moving some storage onto tape, you aren't going to be able to purchase name-brand disk storage arrays for the pricing that AWS offers.

If you look at disk (IBM/EMC/HDS) costs; not just drives, but controllers, space, power, and cooling -- that stuff can cost as much as your processing. But, if you are able to keep your old/unused data on tape; using Pareto Principle 80/20 rule; you can get huge savings in density, media, energy, and so on. Doesn't matter if the spinning disk is 30% cheaper or 50% higher capacity, when compared to tape that is literally pennies on the dollar in comparison.

  Tape is the way to go

Re:This sounds like an ad.. (2)

Prehensile Interacti (742615) | about 4 months ago | (#46759031)

Your maths is off. $60 a month is $0.16 / hour (* 12 / (365.25 * 24)).

Also you're using AWS wrong, if you're comparing a by the hour price, with a contract price elsewhere. If you take AWS 1yr contract pricing, then the m3.xlarge will set you back $127pcm or $81 if you commit to 3yrs.

Sure it's more expensive, but not the orders of magnitude more that you claim. AWS is probably not cost-effective for a single box, but that's not the real use-case for cloud computing. If your workload is burstable, then only being active for the hours you need will save. And if you're scaled up to more than a single box, then having your next boxes in a different availability zone to increase your overall reliability is very hard to do outside of cloud . Quality infrastructure costs.

Not authors though (0)

Anonymous Coward | about 4 months ago | (#46757505)

AWS may be cutting the fees it charges for file downloads, but the fees that Amazon charges authors for downloading their ebook to customers remains gross. It's 15 cent per megabyte, over 100 times what AWS charges and roughly the equivalent of a $400 hamburger.

Only cheap for the big players (1)

Anonymous Coward | about 4 months ago | (#46757527)

Ignoring costs for persistent storage and network traffic (which will not be negligible, by the way), an EC2 m3.2xlarge Heavy Utilization Reserved Instance in N. Virginia costs $2691 up-front (for a 3 year agreement; i.e., getting the best possible per-hour rate) plus $86.40 per month, assuming you want 24/7 uptime (which, if your web server isn't up 24/7, you are just losing business). This is for a minuscule 160 GB of SSD storage, 8 "virtual CPUs" (which works out to be slower than a non-virtualized dedicated Ivy Bridge Xeon), and 30 GB of memory.

Even if you could smooth out the $2691 over 3 years, that's $86.40+$74.75 per month = $161.15 per month. And, again, this does not count persistent storage or internet traffic, which are very expensive.

I am paying about $105/month at Hetzner for a Core i7-3770, 32 GB DDR3, and 2 x 3TB HDD in hardware RAID-1 with an LSI RAID controller, a 1 Gbps dedicated port, and an IPv4 /28. My virtualization is container-based, so I have zero virtualization overhead, whereas EC2's hypervised virtualization carries a measurable overhead. The network and power to my server have been up 100% of the time since I started dealing with Hetzner in 2008. None of my disks have ever failed.

So: I don't have to put out a ridiculous amount of money up-front; I have no virtualization overhead; I have 2 GB more memory than an x2large; I have 18.75 times more usable storage than an x2large; I have a /28 to assign out to my containers; and I'm not competing for other users on my box who might be using some of my resources, as is often the case with S3/EC2. And it turns out to be cheaper on a per-month basis if you factor in the upfront cost. If you instead went with an on-demand instance with EC2, then EC2 becomes even more expensive.

And this is after **40** price reductions from EC2? I can't imagine how expensive it must've been back then. Yeesh. Nope, cloud is not cost-competitive for the little guy who just wants a beefy box on the internet. You'd probably have to provision something like 200 instances for it to start being cost-effective.

They're no better on the low end, BTW. A cheap Atom or Core2-era Xeon box will own EC2 on cost effectiveness on lower-end hardware any day of the week, even after EC2 has had another 20 price reductions.

Put simply, if you aren't pricing hardware for a Fortune 1000 company, or a smaller company whose business model depends on having lots of compute or network throughput or storage, EC2 is not cost effective. Hobbyists and independent developers should look elsewhere.

Re:Only cheap for the big players (2)

FlyHelicopters (1540845) | about 4 months ago | (#46759167)

Even if you could smooth out the $2691 over 3 years, that's $86.40+$74.75 per month = $161.15 per month

If $161 per month is a serious cost for your business, then you aren't a real business.

That is chump change.

Re:Only cheap for the big players (1)

Prehensile Interacti (742615) | about 4 months ago | (#46759477)

I would be very concerned about running a single m3.2xlarge in AWS.

Presuming you're hosting something that you intend to grow, you have no room to manoeuvre when your user growth maxes out. My rule of thumb is to deploy on a large until you max out. Then scale vertically to keep your site operational onto the xlarge, while you put the development into scaling out horizontally. Horizontal scaling will take development effort, often considerable amounts. You keep the 2xlarge in your back pocket for emergencies.

Of course once you have more than one box serving your content, then this is where cloud comes into its own. You ensure your boxes are distributed in different data centres, to increase your availability when disaster strikes - it will! At that point cheap single-box offerings are moot, because its apples and oranges.

Focusing on the wrong hand (2)

putaro (235078) | about 4 months ago | (#46757607)

The article focused on how Amazon cuts hardware costs. The first step there is a big one - once you let go of buying name brand hardware, especially for storage, the price drop dramatically. So dramatically, in fact, that hosting (largely electricity, cooling and network connectivity) becomes the major cost in the equation. Amazon is pushing for extremely high density, however, that has a ripple effect throughout your whole datacenter design. If you're not in a high cost area, you might ask why focus on density because floor space is relatively cheap.

I don't get it. (1)

digitalPhant0m (1424687) | about 4 months ago | (#46757981)

So the story is Amazon provides cheap services by cutting costs. Is this new or some kind of bad thing?
The way I see it the consumer benefits from cheaper service.

does amazon AWS pay well? (2, Interesting)

Anonymous Coward | about 4 months ago | (#46758587)

I got a couple of recruiting calls from Amazon AWS in northern virginia last year. Wasn't really on the market and I don't believe I applied to them. They probably got my resume off a job site. I generally don't take interviews without talking money first (Im in the top of the market, so why waste my time if you can't pay?). Typically if they can't afford me, it ends there. They refused to talk numbers. I also got back a bizarre statement of 'there is more to working at amazon, then money'. This typically means 'we don't pay well, but we act cool so we get people to work alot of hours for less'. I have found that places that have statements like that require you to live there and don't pay well. So they want the type of person who will just stay put, accept less money and more hours than you can get down the street.

I passed on the interview. The impression I got was that it was a really long interview process and I didn't want to be bothered.

Anyone know about this? The position was in Herndon, VA.

Re:does amazon AWS pay well? (1)

Anonymous Coward | about 4 months ago | (#46759609)

When I left Microsoft to go work for Amazon I got a small pay bump. Microsoft doesn't pay particularly well (at least at the time they publicly stated that their target was to be in the 65th percentile). And considering that I had been at MS for some time, I was probably underpaid there (yearly raises were OK but they weren't in line with market wage increases so the longer you stayed, the worse it got)

Amazon did offer me a decent sign-in bonus that required me to stay with the company for a given length of time. That was nice. Hint: put it in the bank. Not everybody lasts long enough to keep the money.

What really did it for me at Amazon was the stock. It kept going up and up so I made good money there. And since I was doing well they kept giving me more at review time.

What a lot of people don't like at Amazon is that they feel treated like cogs. Every company does it but Amazon doesn't sugarcoat it they way MS does. The delicate little snowflakes from Redmond often swim back to the other side of the lake after a year or two, not always by choice.

Also, be ready to be on call and to come work week ends on occasion.

Amazon is too rough for some but if you can make it there, you can make it anywhere. I learned a ton while working for them, really sharpened my technical skills and got into a "just do it" state of mind that has served me well with other employers.

Dreamhost "DreamObjects" is now $0.025/GB/month. N (0)

Anonymous Coward | about 4 months ago | (#46759839)

I imagine it can be competition from Dreamhost, among others.

http://www.dreamhost.com/cloud/dreamobjects/

http://www.dreamhost.com/cloud/

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