I'm leaving the cloud! (...and why you probably should too)

Transition to Dedicated Servers [00:00]

• The founder's SAS products were initially hosted entirely on AWS but have since been moved to dedicated bare metal servers from Hzner, a small German company.
• Approximately 80% of systems now run on these dedicated servers using open-source software, with only about 20% remaining in the cloud.
• This shift is described as a pivotal moment, leading to dramatic cost reductions, faster product performance, quicker deployment of new features, and opening new business opportunities.
• The move involves managing dedicated servers rather than relying on managed serverless infrastructure.

"80% of my systems now run on dedicated servers using open-source software with only about 20% left in the cloud. And this has been a truly pivotal moment for my business."

Past vs. Present Infrastructure [01:20]

• Previously, AWS services like ECS, Fargate, Lambda, Amplify, DynamoDB, SQS, and CloudWatch were used for running code, hosting apps, storing data, managing message queues, and monitoring.
• The new setup utilizes three dedicated servers with Hzner, running code in Docker containers managed by Kubernetes.
• Data storage is handled by PostgreSQL, caching by Redis, message queues by BullMQ, and monitoring by Grafana and Prometheus.
• Most of these new services (Kubernetes, PostgreSQL, Redis, BullMQ, Prometheus) are open-source and free, with Grafana offering a free community edition. The primary cost is for the dedicated servers.

Reason 1: Cost Reduction [03:12]

• The average monthly AWS bill was projected to be $7,800 by early 2025, climbing as the user base grew due to the pay-per-usage model.
• After moving over 80% of infrastructure to dedicated servers, the cost has dropped below $2,000 per month and is expected to fall further, potentially below $1,000.
• The cost of the Hzner servers themselves is around $200 per month, with the remainder of the cost attributed to the 20% of infrastructure still on AWS.
• While initial migration and learning time were significant, the founder argues that the time spent on infrastructure management has returned to previous levels, and the cost savings are potentially unlimited.

"The cost savings, on the other hand, are potentially unlimited and will just keep going up."

Reason 2: Avoiding Vendor Lock-In [05:48]

• Reliance on proprietary AWS services (DynamoDB, Lambda, Fargate) creates vendor lock-in, where a sudden price increase or termination of service by AWS could cripple the business.
• Migrating away from these services can be time-consuming and complex, especially if forced by external circumstances.
• The new setup allows products to run on any hosting company offering VPS or dedicated servers, significantly increasing portability.
• As a demonstration of this portability, one product was temporarily run on three Raspberry Pis, proving the system's ability to function in diverse environments.

"It's not in the interest of AWS or Azure or Google Cloud Platform to have you easily leave."

Reason 3: Lifetime Deal Financial Planning [08:09]

• Offering lifetime deals for software with ongoing operational costs presents financial planning challenges, especially with rising cloud infrastructure costs.
• Fixed infrastructure costs from dedicated servers make financial planning for lifetime deals more manageable and less risky.
• To guarantee lifetime access for customers, the founder is working on making all products fully self-hostable, allowing users to run them on their own servers if the business is unable to host them.

"All of my products fully self-hostable. So, everyone who bought lifetime access to my software can, in the unlikely event that my business won't be able to host it, simply install it on their own servers and host it themselves."

Remaining 20% on AWS [09:51]

• Storage (S3): While Hzner and Cloudflare R2 offer S3-compatible alternatives, they also create vendor lock-in. Min.io, an open-source option, proved too complex and unstable for reliable self-hosting with large storage needs.
• User Authentication (Cognito): AWS Cognito is used for its robust security. The open-source alternative, Keycloak, was found to have poor user and developer experience, leading to a return to Cognito.
• Public Entry Point (CloudFront): AWS CloudFront is used for its security features, including firewalls and DDoS prevention, which are difficult to replicate in a self-hosted environment.
• AI Inference: Services like OpenAI, Replicate, and Vast AI are still used for AI, with hope for more powerful self-hostable GPU options in the future.

Should You Move Off the Cloud? [13:02]

• For small hobby projects, cloud services like Vercel or Netlify are recommended.
• For large-scale, mission-critical businesses, managed hyperscaler platforms like AWS are the best choice.
• For businesses in the middle spectrum, considering dedicated servers is a sensible option due to significant cost savings and increased control.
• Leveraging open-source tools for internal business operations is also a major benefit of on-premises solutions.

"But if you're anywhere on here somewhere in the middle, it makes perfect sense to consider leaving the cloud and using dedicated servers instead."