<story><title>The cost of cloud, a trillion dollar paradox</title><url>https://a16z.com/2021/05/27/cost-of-cloud-paradox-market-cap-cloud-lifecycle-scale-growth-repatriation-optimization/</url></story><parent_chain><item><author>peterbonney</author><text>Am I alone in not seeing a paradox here? It&amp;#x27;s no different from a variety of things that make sense at some scales and not at others.&lt;p&gt;Seems similar to office space - a 5 person company will find the economics of coworking space compelling, a 500 person company will do better with a long-term lease with a commercial landlord, and a 50,000 person company might have their own property management team in-house. That doesn&amp;#x27;t create a paradox in the commercial real estate market, just different solutions for different needs.</text></item></parent_chain><comment><author>nine_k</author><text>The paradox is that if the coworking space were the cloud, it would just grow with you, and easily house a 50k-strong company, while you&amp;#x27;d be paying the same (high) rate per employee.&lt;p&gt;Why would this happen? Because what the company builds is a large and growing money-making contraption right inside the coworking space, also using parts of the building for critical functions, and the door is intentionally kept small. The only way to move that contraption is to dismantle it and reassamble in a much cheaper, purpose-built hangar, rebuilding some of the critical parts along the way. During all that time, the contraption would stop making money.&lt;p&gt;That&amp;#x27;s the beauty of AWS business model: it&amp;#x27;s a no-brainer for a startup to use it, but the startup grows, more financially efficient infrastructure options become unattainable because of the very high cost of the move. This is the best-executed vendor lock-in I know.</text></comment>
<story><title>The cost of cloud, a trillion dollar paradox</title><url>https://a16z.com/2021/05/27/cost-of-cloud-paradox-market-cap-cloud-lifecycle-scale-growth-repatriation-optimization/</url></story><parent_chain><item><author>peterbonney</author><text>Am I alone in not seeing a paradox here? It&amp;#x27;s no different from a variety of things that make sense at some scales and not at others.&lt;p&gt;Seems similar to office space - a 5 person company will find the economics of coworking space compelling, a 500 person company will do better with a long-term lease with a commercial landlord, and a 50,000 person company might have their own property management team in-house. That doesn&amp;#x27;t create a paradox in the commercial real estate market, just different solutions for different needs.</text></item></parent_chain><comment><author>Agingcoder</author><text>The paradox is that in spite of the huge costs, very large companies are still moving to (or using) the cloud.&lt;p&gt;I&amp;#x27;ve had this discussion many times where I work, and we&amp;#x27;ve refrained from using cloud services since they are extraordinary expensive compared to what we can do internally.&lt;p&gt;Yet, people seem to be convinced that prices are ok, and that going outside will let them &lt;i&gt;reduce&lt;/i&gt; their infrastructure footprint.&lt;p&gt;For some reason I don&amp;#x27;t quite understand, people tend to be attracted by the cloud, even when it makes no sense economically whatsoever, and talking sense into them is surprisingly difficult.&lt;p&gt;So yes, it seems obvious that people will choose the most cost effective solution. However, it seems like they don&amp;#x27;t!</text></comment>