With cloud vs DC you also needs to consider that re-sizing datacenter space is a very slow process, and if you're wrong about how much you need it's a massive pain. Buy too much and you're wasting money, buy too little and you're stuck throwing eng time at scrambling to keep your services from falling over, and bottlenecking your entire org with resource constraints.
That's not a judgement on whether it's worth it for Lyft or not, but especially for a growing company with spiky load the decision is not just a dollars to dollars comparison.
You don't, though. You have room for $300m of opex, coming in over time and allocated, as mentioned, around $8m a month. Less early on, more later.
If you gave me $300m to spend, largely up-front, for significant capex purchases? Sure. We could do it. The team I would build would also probably still make mistakes that AWS et al have already largely learned how to avoid, but we could do it. But capex and opex are very different beasts. By the end of that three years I'm already looking at spending way more to refresh what I bought at the start of that three year period because I'm starting to near the end of early contracts and I'm figuring out how best to wrangle, in a way that makes the rest of the business succeed most optimally, a now-heterogeneous environment, etcetera etcetera and etcetera. It's all solvable. But whether it's cheaper, at scale, and more reliable, and presents a unified tool for use by the business...that's a harder question.
Understanding how capex and opex work and how they differ is pretty critical to successfully running an engineering organization, to say nothing of a company.
If you've built a heterogenous environment at the end of three years, then you've failed.
The reason that AWS, Google, Azure, et.al do so well is that they don't just buy some servers. They do actual capacity maangement, and not a very good job of it I might add. They also manage the lifecycle of every component in the infrastructure such that the next iteration of that component is understood and interchangeable.
Network architecture, for example, should suit the needs of the application, but should also be decoupled from the underlying hardware as that hardware is going to evolve.
Compute is fairly straightforward as well. At the data center level, one makes a bunch of 400W holes. What you fill those 400W holes with is relatively irrelevant.
Fully agreed on all points. But it remains a really hard problem. And when you start to do it out at the scale of something like Lyft, you're gonna blow through your available parts of that $300m (because you can't spend it all up front, obviously) pretty quick.
The care and feeding of fleets of (physical) machines is really, really hard and not to be underestimated.
The thing is, it's not really hard. Quantum computing is hard. Managing IT infrastructure as a value-added component of the business that evolves continuously vs. a cost-center to be bought and forgot is actually not that hard. The only thing hard about that is culture shift.
It's all about leadership. The dearth of skilled leadership is the issue. I'd wager this is how some FAANG companies are managing this. They're hiring people that know what they're doing. One doesn't need to design and build their own servers and network hardware to do well at the scale of folks like Dropbox or Lyft.
Cloud adoption is all about making the issue someone else's problem, which is only kicking the can down the road.
Eventually, every company that does a thing will realize that their survival is contingent upon becoming a software company that does that thing.
Respectfully, having read your other comments: I'll answer that question if you demonstrate to me an understanding of the difference between $300M/3 years capex and $8M/month/3 years opex.
If you do that, though, my answer will be "right, so we're done here."
I'm mostly just having a laugh so I won't be able to explain the difference. If the money works in ways a lay man is familiar I'd expect I would be able to afford the necessary man power and equipment so far under 8m per month after equipment purchase that I don't really need to know the details of the finance opex/Capex difference. I really appreciate you taking the time to bring up your good points.
That's not a judgement on whether it's worth it for Lyft or not, but especially for a growing company with spiky load the decision is not just a dollars to dollars comparison.