Comment by phiresky
1 day ago
A $120M spend on AWS is equivalent to around a $12M spend on Hetzner Dedicated (likely even less, the factor is 10-20x in my experience), so that would be 3% of their revenue from a single customer.
1 day ago
A $120M spend on AWS is equivalent to around a $12M spend on Hetzner Dedicated (likely even less, the factor is 10-20x in my experience), so that would be 3% of their revenue from a single customer.
> A $120M spend on AWS is equivalent to around a $12M spend on Hetzner Dedicated (likely even less, the factor is 10-20x in my experience), so that would be 3% of their revenue from a single customer.
I'm not convinced.
I assume someone at Netflix has thought about this, because if that were true and as simple as you say, Netflix would simply just buy Hetzner.
I think there lots of reasons you could have this experience, and it still wouldn't be Netflix's experience.
For one, big applications tend to get discounts. A decade ago when I (the company I was working for) was paying Amazon a mere $0,2M a month and getting much better prices from my account manager than were posted on the website.
There are other reasons (mostly from my own experiences pricing/costing big applications, but also due to some exotic/unusual Amazon features I'm sure Netflix depends on) but this is probably big enough: Volume gets discounts, and at Netflix-size I would expect spectacular discounts.
I do not think we can estimate the factor better than 1.5-2x without a really good example/case-study of a company someplace in-between: How big are the companies you're thinking about? If they're not spending at least $5m a month I doubt the figures would be indicative of the kind of savings Netflix could expect.
We run our own infrastructure, sometimes with our own fincing (4), sometimes external (3). The cost is in tens of millions per year.
When I used to compare to aws, only egress at list price costs as much as my whole infra hosting. All of it.
I would be very interested to understand why netflix does not go 3/4 route. I would speculate that they get more return from putting money in optimising costs for creating original content, rather than cloud bill.
> I would be very interested to understand why netflix does not go 3/4 route. I would speculate that they get more return from putting money in optimising costs for creating original content, rather than cloud bill.
I invest in Netflix, which means I'm giving them some fast cash to grow that business.
I'm not giving them cash so that they can have cash.
If they share a business plan that involves them having cash to do X, I wonder why they aren't just taking my cash to do X.
They know this. That's why on the investors calls they don't talk about "optimising costs" unless they're in trouble.
I understand self-hosting and self-building saves money in the long-long term, and so I do this in my own business, but I'm also not a public company constantly raising money.
> When I used to compare to aws, only egress at list price costs as much as my whole infra hosting. All of it.
I'm a mere 0,1% of your spend, and I get discounts.
You would not be paying "list price".
Netflix definitely would not be.
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