Zoom going with Oracle Cloud was a puzzling decision to many. This is not a post per se but a collection of interesting notes that emerged from related articles . Anyone accidentally on my blog can skip this.

As per “Cloud Economist” Corey Quinn:

• Costs are all networking/egress costs, not compute. Storage is negligible. Data transfer is the lions share.
• Oracle is 10X cheaper while not 10X worse and also offers 30% discount for 1-year commitment
• Zooms seems fairly cloud agnostic and doesn’t abandon existing existing setups. Just the networking piece. The below are all quotes from a Hacker News discussion.  On costs “If you’re building an infrastructure company, or any bandwidth intensive product, it makes sense pretty early. For example, it would be impossible to build a competitive CDN or VPN company based on AWS infrastructure . It would also be hard for Zoom to offer a free tier if they were paying per gigabyte for bandwidth, since it would essentially mean every extra second of a meeting cost them money directly.

The fundamental problem is that AWS (or any major cloud) charges you for the amount of “stuff” you put through the pipe _($/gb),_but with colocation you can pay a fixed cost for the size of the pipe ($/gbps). This allows you to do your own traffic shaping and absorb bandwidth costs without needing to pass them onto your customers. This is the dirty, open secret of cloud pricing models. It’s also their moat, which makes it infeasible to do something like “build AWS on AWS.” When you buy your own gear, etc. and co-locate, you pay for the pipe instead of paying-per-GB for what goes through the pipe. This makes sense pretty early on if you’re a bandwidth intensive product, cloud provider markups start becoming insane. Modern data-centers of non-cloud providers are just servers in a colo.  “Having servers in a colo is pretty much what “having a datacenter” means for the last 10 years or so. I’m surprised at your viewpoint of “having a datacentre” meaning only having direct ownership of the piece of land on which the datacentre resides . That’s a pretty rigid and outdated definition.”

“Just to be clear - colocation here is in order of thousands of square feet. The datacenter provider provides redundant utilities. The customer does everything else. ” On how AWS also does co-lo “They (AWS) use exclusive sections of an existing colo provider facilities, often called data suites or data halls at least in Australia, where the 3 AZs are split between numerous commercial colo facilities. They get enough control through their contracts to make sure the hosting provider provides exactly what they need to spec.” Nuances of data-centers “Designing and operating datacenter facilities is specialized work, and it’s about compliance, auditing, risk management, electrical, plumbing, hvac and other skilled trades. The datacenter industry actually has very little to do with computers, so there is a natural split between the facility and the server / network equipment it houses. Basically all commercial datacenter providers operate as REITs, which is tax advantageous but extremely limiting in some ways. Amazon can benefit from this (with lower pricing) without dealing with it themselves. Owning can offer some advantages, but it also means you’re with that site for the long, long haul . Efficiencies of designs are always increasing, so operating in an old facility costs you money. If you built the site to your own spec, good luck exiting – the next owner will have to do a total overhaul to get it to industry spec and get customers. Even if you have a 10 year lease, there are always ways to get out if you want to . Especially if you’re Amazon.”

“They (Google & Facebook) build sites, but they also lease space from the same providers as everyone else. It’s also worth noting that sometimes when a company builds a datacenter in a green field situation, it may be working with a datacenter provider on that project . So the company may own it, but they’re paying the provider to use their design elements and potentially to operate it. ”

Oracle cloud is not crap (?!) “ I migrated the company’s services from AWS to OCI at the startup I was at. The trade-off is simple, if Oracle can say $product runs on OCI, they’ll put you in front of the biggest industry players who are using their POS, database - and since our sales pipeline pivoted around web integrations this was crucial . They also give a bunch of credits (as do the other providers).

We argued against it in the dev team, but it wasn’t the worst cloud migration I’ve done. The console reminds me of early days AWS as it’s essentially just VPC+EC2+S3, but it was refreshing to spin up a server without a pages of config being presented to you . We took the opportunity to containerise our older sites and ran everything in their managed k8s cluster. I very rarely had to use the console for anything, which tbh is a bit of a grab-bag of managed services beyond the core cloud offering . Terraform support is there if you need to do anything serious.”

Possible competitive pressures driving this “ Why? Is it because of cost? Perhaps nepotism? I don’ see a reason why Amazon or Azure would be passed over in favour of Oracle. Why wasn’t GCP a contender either? Something seems fishy… someone from Zoom care to chime in? Maybe they are afraid that Amazon or Microsoft with their tradition of copying competition would pose a threat? Even then, Microsoft is already competing using Microsoft Teams and if Amazon wanted to it wouldn’t be hard for them at all to come up with a product.” “ My guess is simply, they don’t want to fund their own competitors. Microsoft is a direct competitor already (so is Google,) and who knows what Amazon will do . That really only leaves IBM and Oracle. I’ve always been baffled when someone hosts on their competitors’ platform. Like Netflix hosting on AWS, and Grocery Stores hosting on AWS . Microsoft & Google rarely have that problem (except on this one.) ”

Walmart (& other retailers) hate AWS “I’ve been impressed by what I’ve heard about Walmart. They apparently won’t even use a SaaS tool if it’s hosted on Amazon.” “I worked at walmart labs for 3 years and that is correct. We had one, on premise, service that phoned home for license information to an AWS address and our request to whitelist the ip address had to go up to the CTO.” “They really don’t like AWS. It’s all openstack/azure/gcp/vmware depending on the use case” “I work primarily with grocery retailers, and this is quite accurate. Almost all of them have told us that they will not use any of our services if they are hosted in AWS . They used to be hesitant, but willing, but once Amazon acquired Whole Foods, it became a deal breaker.”

How a panic driven Netflix decided to jump to AWS “>> I’ve always been baffled when someone hosts on their competitors’ platform. Like Netflix hosting on AWS
Netflix had a 5-day outage caused by issues with their private DC back in the day.IT mgmt. decided their expertise wasn’t in operating DC’s, SV real estate was too expensive, and doing multi-region themselves was too expensive.AWS was picked as it was the only viable cloud offering at the time, and the decision was made to be mono-cloud until later. (Azure was used for storing backups.)Note that AWS was never used for large-scale streaming. Either a partner CDN was used, or now their own CDN.Source: worked at Netflix.” The hot headline/marketing budget angle of Oracle subsidising Zoom crazily “If you aren’t knowledgeable enough about cloud providers to evaluate them directly on their merits, then you look for signals. Some people might think, hey, Zoom is doing well, they are a well-known, up-and-coming company, and they chose Oracle, from which we infer that Oracle must be good choice.”