[bushbaba]

My company is on prem, spending north of 1 billion per year. Cloud is actually cheaper when considering total cost of ownership. Thats salaries, opex, capex costs. Worse, our speed to delivery is generally worse.

Because on prem is inelastic, we are at sub 10% peak utilization of compute resources. If we added in the likely higher cloud utilization rate we are talking of 30%+ savings from on prem.

[bakies]

> we are at sub 10% peak utilization of compute resources

so... you bought way too much hardware?

[stackskipton]

That's not unusual. First off, sometimes 1000 extra dollars will get you a ton more compute you need so why not and second, on prem tends to be extremely inelastic so you buy a ton of compute because you never know when compute requirements change.

[ecshafer]

Peak Utilization is a tough one for on prem and is a decent argument for cloud. I was at a company that was also at <10% peak utilization most of the time. It was finance, so it was mostly doing nothing, except for the couple days a year where we shot up 10000x, so we had to build for that case. So yeah losing the data centers, and cloud was a cost savings.

[senderista]

So the "obvious" (but complex!) solution is a "hybrid cloud": use on-prem for the predictable, constant "DC component" of your demand, and use cloud for cyclical or unpredictable demand changes. That will keep peak demand decoupled from permanently provisioned capacity while saving on always-utilized capacity. Easier said than done, of course.

[pyrale]

My comparison was cloud vs renting metal, not buying your own machines.