37signals Says Goodbye to AWS: Full S3 Migration and $10M in Projected Savings

Something an older and wiser programmer taught me, is to think of the infrastructure costs as a per-user cost. These numbers look enormous next to my bank balance, but if you save 500k per year to service 1 million users, it&#x27;s nothing to your bottom line.<p>Meanwhile there&#x27;s the opportunity cost of moving. All of the people who put effort into this migration, who could otherwise be building something revenue-generating. I think that&#x27;s why in many companies cloud costs are a problem, but never enough to make it high up the backlog.

Just goes to show how greedy AWS has become with pricing now that everyone is locked in. If anything they should be able to use their scale to make it cheaper than doing it on-prem and all the costs that go with that. Strangely at the time it did appear cheaper when we all moved to cloud for these so called savings a decade ago.

&gt; The company estimates it will save more than $10 million over the next five years, reducing its annual infrastructure bill from $3.2 million to less than $1 million — all managed by the same technical team that previously handled the cloud.<p>It would be cool to get more into this. One of the reasons my (much smaller) org insists on S3 (or possibly R2) is that they feel they are paying rent for the infrastructure management that they would otherwise have to hire for. If there was data out there that showed that an org could switch to a less managed infrastructure without pulling people off of other projects to fill in the gaps it would be an awesome selling point.

18 PB is not a trivial amount of storage. I think what most people always underestimate is how much engineering effort it takes in the background to keep such big infrastructure up and running reliably.<p>I would like to have a detailed total cost of ownership calculation. Of course, renting hardware - let&#x27;s say in Hetzner or some other cheap provider - is always cheaper than AWS or any other major cloud provider in simple 1:1 pricing comparison. So that is nothing new. But the pure CPU&#x2F;RAM&#x2F;SSD costs is just a fraction of what it really costs to run such infrastructure.

Related <i>It&#x27;s five grand a day to miss our S3 exit</i> (187 points, 1 month ago, 176 points) <a href="https:&#x2F;&#x2F;news.ycombinator.com&#x2F;item?id=43489698">https:&#x2F;&#x2F;news.ycombinator.com&#x2F;item?id=43489698</a>

Do note that it took them ~2 years to move off of S3. The ROI of getting off of compute and hosted services is often there, but S3 is still pretty great from a business perspective.

Good for them. It is becoming tiring paying rent seekers to run our own software.

&gt;&gt;all managed by the same technical team that previously handled the cloud.<p>Does this imply they haven’t hired any additional personnel? I would’ve thought moving everything in-house would need more hands on deck—for stuff like security, keeping things up and running, and all the behind-the-scenes stuff AWS usually takes care of.<p>If they managed with the same team, that’s darned impressive.

I see something analogous happening in about 5 years with LLMs when people realize they can get 80% of the value for 20% of the cost by using an on-site model rather than paying out the nose to OpenAI.

I&#x27;m guessing they probably could not have scaled as far and fast as they did without AWS. To me, this scalability is the cost of doing business as a younger growth company. As your workload becomes more predictable, this additional cost becomes less beneficial. I&#x27;ve come to see that often companies say they are saving money by moving off AWS, but much of these saving come as part of rearchitecting or optimizing their systems.

The twitter criticism is getting funnier.<p><a href="https:&#x2F;&#x2F;x.com&#x2F;zackkanter&#x2F;status&#x2F;1920284851506225498" rel="nofollow">https:&#x2F;&#x2F;x.com&#x2F;zackkanter&#x2F;status&#x2F;1920284851506225498</a> criticizes 37signal of missing an opportunity because they focused too much on reducing COGS. An example opportunity that this guy gave is really really random. As you guess it, it&#x27;s the AI opportunity cost. Because 37Signal hasn&#x27;t integrated any AI. That must be a loss! Of course, it&#x27;s the AI again!<p><a href="https:&#x2F;&#x2F;x.com&#x2F;grinich&#x2F;status&#x2F;1920636351139230043" rel="nofollow">https:&#x2F;&#x2F;x.com&#x2F;grinich&#x2F;status&#x2F;1920636351139230043</a> (from WorkOS&#x27; CEO) criticizes 37Signal of not growing and losing to Jira and Linear because 37Signal focuses on saving a couple millions of dollars a year.<p>Jira isn&#x27;t even profitable after all these decades of &quot;winning&quot;. It&#x27;s a project management tool. What do they even spend money on?<p>Linear is one of its kind startup. Is losing to Linear that bad? I too want to lose to Linear and make &gt;$10,000,000 a year with my product.<p>The response from DHH is perfect tho: <a href="https:&#x2F;&#x2F;x.com&#x2F;dhh&#x2F;status&#x2F;1921075541672612294" rel="nofollow">https:&#x2F;&#x2F;x.com&#x2F;dhh&#x2F;status&#x2F;1921075541672612294</a><p>&quot;Problem is that nobody seems content to merely put their dent in the universe. No, they have to fucking own the universe. It’s not enough to be in the market, they have to dominate it. It’s not enough to serve customers, they have to capture them.&quot;<p>Not only that, project management tool&#x27;s market is fragmented. It&#x27;ll never be a winner-take-all given there are hundreds of use cases &#x2F; settings &#x2F; industries. It&#x27;s going to be extremely difficult to be Number 1. Investing in growth would kill you. Reducing COGS and staying profitable is the best way IMO.

I remember when the discussion was how to escape the lock-in by hardware vendors such as EMC and Dell. I believe a lot of initial desire to go cloud was the idea it was easier to migrate from AWS to Azure to GCP if necessary. Now we know that such migrations are multi year efforts. Exactly like in the bad old days.

Why was not the original post posted by DHH, instead of the advertorial?<p><a href="https:&#x2F;&#x2F;www.linkedin.com&#x2F;posts&#x2F;david-heinemeier-hansson-374b18221_after-over-a-decade-on-aws-s3-its-finally-activity-7325882069325152256-qt8S&#x2F;" rel="nofollow">https:&#x2F;&#x2F;www.linkedin.com&#x2F;posts&#x2F;david-heinemeier-hansson-374b...</a>

Just my two cents on this topic.<p>What we are looking for, are easier migrations in cloud I suppose and multi cloud strategy.<p>I am pretty sure that 37Signals had gotten their servers set up in a lot of countries for easier latency but a lot of companies can&#x27;t.<p>We are then forced to use S3 or the likes and honestly I am starting to wonder about S3....<p>Like I was watching theo&#x27;s video on everything being a wrapper and he mentioned that in some sense he basically created uploadthing because s3 was cheaper but had higher egress and cloudflare r2 was more expensive but had no egress and so he wanted a way to optimize it... thus uploadthing.<p>But this whole idea seems so bizarringly stupid to me, I had seen a website which compared such providers pricing and to be quite frank, cloudflare was in the lowest maybe only more expensive than backblaze or wasabi but both of these had a sort of fair use limit which might be vague...<p>In the meanwhile, I have found another website giving some decent comparisons and though I don&#x27;t like its UI as much as the other website which had some really cool graphs.., its also well built and professional <a href="https:&#x2F;&#x2F;www.s3compare.io&#x2F;" rel="nofollow">https:&#x2F;&#x2F;www.s3compare.io&#x2F;</a><p>and I have to say, somebody might see the amazon 4$ per Tb compared to cloudflare 15$ per tb and could&#x27;ve said wow maybe theo was right... untill they saw the 90.00 USD&#x2F;tb...<p>I mean, I get that but if that has to be an archive &#x2F; very rarely accessed, then why not just use wasabi or backblaze (I was going to prefer backblaze untill I saw the 10$ per tb egress for backblaze and 0 $ for wasabi.... yeah)<p>wasabi&#x2F;backblaze both seems to be really great options, they are just fractionally more expensive than Aws s3 glacier (4.99$ per Tb) and they don&#x27;t have egregious egress fees....<p>For something more frequent, use cloudflare r2 and for archiving&#x2F;backup, use wasabi&#x2F;backblaze , maybe even the 3-2-1 strategy... I am not sure if wasabi&#x2F;backblaze already follow that

&gt; Then when the people who put this together leave<p>Why should they leave without creating institutional knowledge and educating those who come after them... That is how it was before the &#x27;mainstream tech&#x27; and its &#x27;turnover&#x2F;after me, deluge&#x27; mentality took over and made shareholder capitalism made every employee a disposable cog. That is what all orgs. should return to now that the zirp ended and shareholder capitalism is kaput.

&gt; We migrated to cloud and saved $X per year<p>&gt; 3 years later<p>&gt; We migrated off the cloud and saved $Y per year<p>A tale as old as time.

What are good US-based dedicated server hosts? Like Hetzner but in the US?

I think the only interesting &amp; substantive piece of info here is that AWS will sometimes waive DTO fees. (For once I&#x27;m actually thankful for GDPR!)<p>Their claimed savings are suspect, borderline clickbait, and even if they are correct the preconditions to realize those savings don&#x27;t apply to the vast majority of other companies.<p>They already had datacenters and claim that there will be no increased opex for things like power, network (which must be substantial if they pay 1.5MM for 18PB) and employees, only needed a trivial amount of space they already had, and sounds like they&#x27;re sacrificing redundancy too.

Tl;DR: don&#x27;t use RoR in AWS because it will cost you.