<story><title>How much is Spotify paying Google Cloud?</title><url>https://medium.com/@davidmytton/how-much-is-spotify-paying-google-cloud-ebb3bf180f15</url></story><parent_chain><item><author>eloff</author><text>So I don&amp;#x27;t get this. 1gbps and 2 million events&amp;#x2F;s could be comfortably handled on a single beefy 10gbps server. Add a second for failover. That&amp;#x27;s maximum $20K&amp;#x2F;year which is far cry from $3.5 million. How does this even begin to make economic sense? The economy of the cloud has never made sense to me, since it&amp;#x27;s cheaper to overbuy your capacity by 5x in dedicated machines than use AWS or GCE. After just one year you&amp;#x27;ve paid for all your capital expenditures and then you&amp;#x27;re minting it. For a startup the appeal of the cloud is obvious, but for a big established company with known technical requirements I don&amp;#x27;t get it at all.</text></item><item><author>gberger</author><text>$290k per month is $3.5M per year.&lt;p&gt;A software engineer at Google earns, on average, $127k per year [1]. We multiply that by 1.4 [2] to obtain a cost per employee of $177k.&lt;p&gt;This means that according to this estimation, Spotify pays for 20 Google software engineers.&lt;p&gt;[1] &lt;a href=&quot;https:&amp;#x2F;&amp;#x2F;www.glassdoor.com&amp;#x2F;Salary&amp;#x2F;Google-Salaries-E9079.htm&quot; rel=&quot;nofollow&quot;&gt;https:&amp;#x2F;&amp;#x2F;www.glassdoor.com&amp;#x2F;Salary&amp;#x2F;Google-Salaries-E9079.htm&lt;/a&gt;
[2] &lt;a href=&quot;http:&amp;#x2F;&amp;#x2F;web.mit.edu&amp;#x2F;e-club&amp;#x2F;hadzima&amp;#x2F;how-much-does-an-employee-cost.html&quot; rel=&quot;nofollow&quot;&gt;http:&amp;#x2F;&amp;#x2F;web.mit.edu&amp;#x2F;e-club&amp;#x2F;hadzima&amp;#x2F;how-much-does-an-employee-...&lt;/a&gt;</text></item></parent_chain><comment><author>kpil</author><text>You think like an engineer :-)&lt;p&gt;I think cloud services are appealing for a couple of reasons from a top-brass perspective.&lt;p&gt;a) You free the capital, and the balance sheet looks nicer.&lt;p&gt;b) It&amp;#x27;s less complicated on a PowerPoint level. Just a box. (probably not the reason Spotify opted for google though.)&lt;p&gt;c) You don&amp;#x27;t think it&amp;#x27;s your core competence to keep servers safe and running, and rather would like to spend the time and effort on developing services while enjoying reason a) although you know it won&amp;#x27;t be cheaper.&lt;p&gt;d) Maybe it&amp;#x27;s hard to find the right people</text></comment>
<story><title>How much is Spotify paying Google Cloud?</title><url>https://medium.com/@davidmytton/how-much-is-spotify-paying-google-cloud-ebb3bf180f15</url></story><parent_chain><item><author>eloff</author><text>So I don&amp;#x27;t get this. 1gbps and 2 million events&amp;#x2F;s could be comfortably handled on a single beefy 10gbps server. Add a second for failover. That&amp;#x27;s maximum $20K&amp;#x2F;year which is far cry from $3.5 million. How does this even begin to make economic sense? The economy of the cloud has never made sense to me, since it&amp;#x27;s cheaper to overbuy your capacity by 5x in dedicated machines than use AWS or GCE. After just one year you&amp;#x27;ve paid for all your capital expenditures and then you&amp;#x27;re minting it. For a startup the appeal of the cloud is obvious, but for a big established company with known technical requirements I don&amp;#x27;t get it at all.</text></item><item><author>gberger</author><text>$290k per month is $3.5M per year.&lt;p&gt;A software engineer at Google earns, on average, $127k per year [1]. We multiply that by 1.4 [2] to obtain a cost per employee of $177k.&lt;p&gt;This means that according to this estimation, Spotify pays for 20 Google software engineers.&lt;p&gt;[1] &lt;a href=&quot;https:&amp;#x2F;&amp;#x2F;www.glassdoor.com&amp;#x2F;Salary&amp;#x2F;Google-Salaries-E9079.htm&quot; rel=&quot;nofollow&quot;&gt;https:&amp;#x2F;&amp;#x2F;www.glassdoor.com&amp;#x2F;Salary&amp;#x2F;Google-Salaries-E9079.htm&lt;/a&gt;
[2] &lt;a href=&quot;http:&amp;#x2F;&amp;#x2F;web.mit.edu&amp;#x2F;e-club&amp;#x2F;hadzima&amp;#x2F;how-much-does-an-employee-cost.html&quot; rel=&quot;nofollow&quot;&gt;http:&amp;#x2F;&amp;#x2F;web.mit.edu&amp;#x2F;e-club&amp;#x2F;hadzima&amp;#x2F;how-much-does-an-employee-...&lt;/a&gt;</text></item></parent_chain><comment><author>dogma1138</author><text>ISP cost, backups, patching, hardware upgrades, co-location, DR, insurance, paying for physical and cyber-security, personnel etc.&lt;p&gt;outsourcing allot of those things saves money it&amp;#x27;s also a different expense of you buy infrastructure  it has value which means depreciation overtime which affects how your accounting is done.&lt;p&gt;Cloud makes sense for allot of companies not just startups the biggest reason why companies with eatablished infrastructure don&amp;#x27;t migrate is the initial cost and regulation.</text></comment>