Basecamp decamps from cloud: 'Renting computers is (mostly) a bad deal'
- Reference: 1666274413
- News link: https://www.theregister.co.uk/2022/10/20/basecamp_decamps_from_cloud/
- Source link:
Bucking that inevitable trend, however, is David Heinemeier Hansson, CTO of project management platform Basecamp.
"Renting computers is (mostly) a bad deal for medium-sized companies like ours with stable growth. The savings promised in reduced complexity never materialized. So we're making our plans to leave," he [1]explained .
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For Basecamp, the cloud made sense in with simple, low traffic applications, where complexity was nixed by starting with fully managed services. The model also offered advantages when there are wild swings or towering peaks in usage. "There's nothing like the cloud when that happens, like we learned when launching [email service] HEY, and suddenly 300,000 users signed up to try our service in three weeks instead of our forecast of 30,000 in six months," he said.
[3]
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However, once users established steady and predictable demand patterns for their applications, the benefits of the cloud evaporated, he said. By continuing to operate in the cloud, Basecamp was sometimes paying an "almost absurd premium" for computing capacity they in all likelihood would never need.
"It's like paying a quarter of your house's value for earthquake insurance when you don't live anywhere near a fault line," said Hansson, adding, "Yeah, sure, if somehow a quake two states over opens the earth so wide it cracks your foundation, you might be happy to have it, but it doesn't feel proportional, does it?"
[5]
He went on to criticize how cloud companies were making "obscene margins" on the computers they rent out. Given [6]Gartner's latest analysis that cloud providers won't cut prices to help recession-hit companies, that's unlikely to change any time soon.
[7]Oracle opens up internal dev tools so customers can build their own apps
[8]Gartner thinks enterprise IT will be immune to recession
[9]Kakao CEO quits, South Korea hits emergency button after dire datacenter blaze
[10]Microsoft makes another round of jobs cuts amid slowing economy
To get a sense of how Basecamp's boat is beating against the current, figures from Canalys published in August [11]showed $62.3 billion was lavished on Infrastructure-as-a-Service (IaaS) in the three months ended June, up 33 percent year-on-year.
Meanwhile, leaders AWS, Microsoft, and Google were increasing their dominance, growing ahead of the market as a whole at 42 percent per annum. Together they accounted for 63 percent of market revenues.
Observers with long enough memories will recall Basecamp is no stranger to pulling out of things, including a sensible approach to people management and public relations.
In May 2021, CEO Jason Fried issued a public apology following a major bust-up over new policies that discouraged employees from discussing "societal politics" at work.
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"David [Heinemeier Hansson] and I completely own the consequences, and we're sorry. We have a lot to learn and reflect on, and we will," [13]he said at the time . ®
Get our [14]Tech Resources
[1] https://world.hey.com/dhh/why-we-re-leaving-the-cloud-654b47e0
[2] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/networks&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=2&c=2Y1Fwln0ze@lzF5S9GvnOMwAAANY&t=ct%3Dns%26unitnum%3D2%26raptor%3Dcondor%26pos%3Dtop%26test%3D0
[3] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/networks&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44Y1Fwln0ze@lzF5S9GvnOMwAAANY&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[4] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/networks&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=3&c=33Y1Fwln0ze@lzF5S9GvnOMwAAANY&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0
[5] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/networks&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44Y1Fwln0ze@lzF5S9GvnOMwAAANY&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[6] https://www.theregister.com/2022/10/19/gartern_sees_enterprise_it_as/
[7] https://www.theregister.com/2022/10/19/oracle_conference_roundup/
[8] https://www.theregister.com/2022/10/19/gartern_sees_enterprise_it_as/
[9] https://www.theregister.com/2022/10/19/kakao_ceo_resigns_datacenter_fire/
[10] https://www.theregister.com/2022/10/18/microsoft_makes_another_round_of/
[11] https://www.theregister.com/2022/08/02/cloud_iaas_canalys_numbers/
[12] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/networks&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=3&c=33Y1Fwln0ze@lzF5S9GvnOMwAAANY&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0
[13] https://www.theregister.com/2021/05/05/basecamp_political_discussion_apology/
[14] https://whitepapers.theregister.com/
I don't disagree, but
Basecamp offers SAAS, not on-premises. The argument against in-cloud hardware applies very well to in-cloud or SAAS software too. The Adobe tax is perhaps the most egregious example of this.
Re: I don't disagree, but
Not necessarily, for a SAAS software company they have the expertise to run their own hardware in-house, it's a core part of their business
That doesn't mean it makes sense for a widget maker to run basecamp software in-house
good for them
I saw a link to another article yesterday quoting something like 80% of survey respondents had their CIOs demanding they halt or reduce cloud spending. Good to see. Cloud can make good sense in some cases but it's really more on the SaaS side(and even then not all cases). IaaS has been a disaster from the beginning, PaaS not far behind for other reasons(as such PaaS has had by far the least adoption I believe among the *aaS things).
Myself I realized this situation about 12 and a half years ago shortly after starting my first investigations for cloud. My first potential cloud project had an ROI of doing things "in house" vs in cloud of 8 months, and that was assuming the cloud solution worked flawlessly which I was sure it would not(due to many factors), but it's hard to quantify that at that stage of planning.
Saved my org(which was "born" in the cloud, so one can't say they "lifted and shifted", the people doing the cloud work had at least 2+ years of prior cloud experience so they weren't newbies) well over $10M since moving out in early 2012(while providing greater performance, security, and reliability at the same time). My manager at the time projected the ROI of bringing stuff in house at 7 months. I had to re-justify data center again many times over the decade as executives came and went, some tried to push cloud again, fell on their faces every time as they faced the massive cost differences.
Offered to save my previous org several million back in 2011 moving out(tiny startup spending upwards of $500k/mo on cloud), everyone in the company was on board except for the board so I left shortly after that, that company is long since dead.
And they wonder why people are so keen to move their customers to "the cloud"?
Lock them in so they can't leave, raise the prices so you make more profit, then extend the hardware refresh cycles to save money... it's like the mainframe market all over again.