Amazon S3 & SmugMug - Some financial details
onethumb
Administrators Posts: 1,269 Major grins
Quite a few of you have asked for more details about Amazon S3 and how we use them. I'm planning on writing up a lot of these detailed posts, but here's the first one: Amazon S3: Show me the money
I could use some digg love if you think it's worth digging, too.
The great thing is that we've been able to put all that extra money saved into building great new features, like all of our Pro improvements and a big secret project that should be coming along soon now, and into hiring some great new people to become SmugMug Support Heroes.
Best of all, your photos are more safe, sound, and secure than ever. :barb
I could use some digg love if you think it's worth digging, too.
The great thing is that we've been able to put all that extra money saved into building great new features, like all of our Pro improvements and a big secret project that should be coming along soon now, and into hiring some great new people to become SmugMug Support Heroes.
Best of all, your photos are more safe, sound, and secure than ever. :barb
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Comments
I dont understand how S3 can provide the same level of storage redundancy (RAID-5, etc) that you all do, all while costing less than 1/5th of what you would be paying. Even with really sweetheart deals with disk manufacturers, data centers, and backbone providers, something isnt adding up to S3 being profitable and thus around for the long run. What is to guarantee that S3 doesn't tank and all of our stuff is lost? (given, i have local backups and all, so no big deal there, but hypothetically). Cutting through all the corporate hype, this question is never addressed (not just by you guys, but by Amazon), at least that I have seen.
So, my question to you is, has Smugmug addressed this question with Amazon?
Cheers,
Russ
-r
We have, and Amazon has been very open about the fact that this is a money losing business in the short term, and a money making business in the long term, for them.
That's how most of their businesses start - they lose money initially as they "land grab" and build scale. Once the economies of scale catch up with them, they start to make money.
But it's important to note that Amazon's businesses, all of them, are very low margin, high volume businesses. They like that, because it leaves very little room for a competitor to compete with them. We like that, of course, because we get great pricing.
Everyone knows that HDD prices fall rapidly, so I imagine it won't be terribly long before they have both enough scale, and the market price of HDDs catches up with them, that they're at least break-even.
One of the nice things about Amazon that almost no-one gets is that their price isn't fixed. A decade from now, it won't be $0.15/GB. It'll be less than a $0.01/GB in all likelihood. But if I bought disks today, the cash I'd have spent is still "sunk", even a decade from now.
So over time, Amazon's pricing improves and we automagically benefit.