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Comment by jamwt | Hacker News Reader

> Oh dear I didn't realise Dropbox had invested all of that time and money moving into their own data centre.

We've had our own datacenters for a very long time; this project just represents moving "blob storage" into our own datacenter rather than just metadata.

> Mass storage with Amazon is much cheaper

As the article says, in Dropbox's particular case this is very untrue. Although I agree with your general point that, absent having something like Dropbox's scale/resources, just using S3 is probably your best bet.

> Can anyone convince me that this move by Dropbox isn't going to end very badly for them?

So, wrt "ending badly", the project has already happened. It's more efficient, faster, more flexible, etc. So I can say with some confidence it won't end badly. :-)

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Sorry I think you misunderstand me. Technically it sounds like a great achievement. Well done! Ending badly I mean that in 5 years time Dropbox will be left with a load of servers and a business model in tatters. It's the economics I think will end badly

Also I am sure the in house data centre looks cheaper to Dropbox - but now they have their own hardware on the balance sheet. But I meant cheaper from a consumer point of view - I get unlimited storage at Amazon for $60 a year.

The vast majority of businesses around the world have "assets". It is a universal practice to depreciate those assets over their expected lifetime. The difference between purchase price and resale value is then treated as a normal business expense over the course of those years. So when the servers lifetime is up there are no "load of servers" to worry about. You throw them out (or re-task them) and get new ones.

These costs are known and planned for. Dropbox wouldn't do this without running the numbers through vast herds of accountants.

Now here is the kicker. Amazon does this too (but slightly less due to economies of scale) and then makes sure their billing covers this.

> but now they have their own hardware on the balance sheet

i don't know if this is true or not, but it isn't at all necessary.

you can just buy everything on an operating lease for a fraction of what amazon or any other provider charges and write the payment off without any sort of depreciation schedule or hit to your cash or unnecessarily grow the balance sheet/liabilities.

how do you think it's possible that you can easily get a $15/month dedicated server?

> how do you think it's possible that you can easily get a $15/month dedicated server?

Sorry makes no sense to me.

I don't understand your concern. Fundamentally, if you have large enough consistent need for storage/VMs/Any non proprietary resource then AWS is not the lowest cost option by a long shot. This is not at all a controversial statement.

Even taking into account depreciation, administration, maintenance etc, if you have a large enough consistent need amazon is not the lowest cost option by a significant margin. This isn't a controversial statement.

Rarely do people "get" that if you have a consistent workload or resource need, AWS is more expensive than your own gear.

But presumably Amazon benefits (saves money) from making more use of hardware resources. It has to have some spare, but not as much spare as a comparable group of non-AWS users would have in total....

Also, presumably, not all the AWS users are awake at the same time ;-)

> But presumably Amazon benefits (saves money) from making more use of hardware resources

yeah, they sure do.

That doesn't have to be true. Amazon or one of their competitors could provide a discount by locking into multi year discounts (e.g. reserved pricing).

The cloud providers are in a cut throat business (mitigated somewhat by value added services), so the price will bob along near cost (though they may eak out more profit on some work loads compared to others).

>in 5 years time Dropbox will be left with a load of servers and a business model in tatters. It's the economics I think will end badly

Your main argument seems to be that Amazon, Microsoft etc will undercut Dropbox on price which is fair enough. However Dropbox has done well so far offering better service and I can see that continuing. The better service thing is mostly about the people running the services and Dropbox seem good.

To see how they are moving away from commodity storage check this out:

("Dropbox used to be fundamentally about storage but now it is changing how we view productivity and collaboration") https://www.siliconrepublic.com/enterprise/2016/03/11/dropbo...

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