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How Amazon Keeps Cutting AWS Prices: Cheapskate Culture
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."
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.
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.
Or it's their unbelievable number of screw ups that ended up in downtime making people not respect them.
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.
Is it just my observation, or are there way too many stupid people in the world?
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.
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.
There are 4 boxes to use in the defense of liberty: soap, ballot, jury, ammo. Use in that order. Starting now.
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.
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.
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.
It could also be blueray disk based. Not as likely as tape based, but could be cheaper/faster at scale.
My God can beat up your God. Just kidding...don't take offense. I know there's no God.
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.
-- these are only opinions and they might not be mine.
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 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.
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.
The Amazon business is focused around it's core principles:
http://www.amazon.com/Values-C...
Notice that "Frugality" is listed as one of them.