Singapore-based SEO solutions company, Ahrefs, claims to have saved US$400 million in just three years by choosing a colocation data centre running Ahrefs-owned hardware.
Data Centre Operations Lead for Ahrefs, Efim Mirochnik, provided a detailed cost comparison exercise in a blog post.
He noted that cloud computing offers many benefits like scalability, flexibility, and fast deployment. However, he decided on behalf of his company to compare the cost of its existing setup with the cost of running a similar setup on a leading cloud IaaS infrastructure.
Ahrefs cost calculation includes the cost of hardware, divided across five years; monthly colocation rental and energy costs, and IP transit and dark fibre transportation costs between the colocation site and point of presence.
The exercise attempts to equate the Ahrefs setup and a comparable cloud environment, but an exact equivalency was not possible. This is partially prevented by the fact that the cloud infrastructure uses a different cost structure from the Ahrefs colocation. For example, Mirochnik noted that the cloud infrastructure did not have an EC2 instance comparable with the number of cores they have at Ahrefs.
“We found an EC2 configuration with half the cores and 1TB RAM. We then compared one Ahrefs server cost to the cost of two such EC2 instances,” said Mirochnik.
Additionally, the Ahrefs team added Elastic Block Storage at an additional cost.
In the end, Ahrefs estimates that one server in the cloud would cost 11.3 times more than the existing colocated setup.
“That means our 20-server rack would transform into just 2 servers,” added Mirochnik.
The $400 million estimate is based on running 850 servers for 2.5 years based on this ‘imaginary’ setup where Ahrefs’ existing structure does not exist 100% in the IaaS cloud.
Ahrefs then determined that these costs would not have been sustainable. Under these circumstances, Mirochnik suggested that ‘Ahrefs would not be profitable, or even exist’.
“I recommend CFOs, CEOs, and business owners interested in sustainable growth to consider and periodically re-evaluate cloud benefits versus actual costs,” said Mirochnik.
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