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Comment by throwdbaaway | Hacker News Reader

I was nodding along until this:

> and THEN we think about how do we make money from it

Do you really need to think? Looking at the on-demand pricing in US East, a m5.4xlarge.elasticsearch instance costs $1.133 an hour, while a m5.4xlarge instance costs $0.768 an hour. That's 47.53% of extra money. And like you said, it only requires a small team to build and maintain the service.

It is no coincidence that all cloud providers are trying to ramp up their hosted services for open source software, even GCP, who historically only focused on their own proprietary stack. There's a lot of money to be made.

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What people often forget is that cross-AZ traffic is included in those .elasticsearch instance prices. In a 3-AZ deployment and given the frequent rebalancing/replication traffic that is a significant line item if you run it yourself. I'm not arguing it's not expensive, but when you look at the TCO it's less obscene than if you just look at EC2 pricing alone.

That's a very good point, I wasn't aware of that.

Do you really think that all it takes to operate an elasticsearch instance is to white-label an equivalent ec2 instance and execute some shell scripts on it?

If that were true, people wouldn't pay for it...

Of course not, don't be ridiculous. My point is that whatever man-power and resources required to run the elasticsearch service can be considered as fixed cost, while the same 47.53% profit margin can continue to "scale" indefinitely, regardless of whether you have 10 customers or 10,000 customers. That's the beauty of it.

As we can see elsewhere in the comments, your biggest competitor appears to be the various kubernetes operators. With kubernetes as the common stack across multiple cloud providers as well as on-prem datacenters, the 10,000 customers can now contribute to the same operator project, to possibly get somewhere close to, or even exceed, what AWS can do with a small team of engineers.

Perhaps anticipating this trend, GKE now has an "autopilot" mode, such that a 30% profit margin is already included in the node pricing. That's one hell of a moneymaker.

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