SNAP's infrastructure story in the S-1 filing was a mess. They had 2016 revenue of $404M with a cost of revenue of $451M. A 5 year, $2 billion dollar vendor lock-in to Google. They basically admitted that Google has them completely by the balls and it costs them $3 per user per year to keep the servers on. Both of these independently are very very bad, together it's a disaster.
Facebook was at $1/user/year in their S-1, Twitter was < $1.
From the SNAP S-1:
"We rely on Google Cloud for the vast majority of our computing, storage, bandwidth, and other services. Any disruption of or interference with our use of the Google Cloud operation would negatively affect our operations and seriously harm our business."
"We have committed to spend $2 billion with Google Cloud over the next five years and have built our software and computer systems to use computing, storage capabilities, bandwidth, and other services provided by Google, some of which do not have an alternative in the market."
For a B2B SAAS company...what's the ideal user cost of infrastructure? (I understand that it depends on the service..but a ratio of profit per user vs cost per user should be close no?)
The ideal cost is as low as possible without sacrificing future scaling needs or development velocity. At some point, you'll start to experience diminishing returns.
It usually goes POC->Cloud provider->Your own gear
apart from the bigger companies (like Fb), have there been any major SaaS companies (esp. B2B but I guess that's trying to be too narrow so B2B & B2C) that have moved from Cloud to their own Data Center? (I know Etsy comes to mind...but apart from them?).
Hacker News and Pinboard (acq. Delicious) run on a single server.
It's not hard, but you do need to know what you're doing and have resources to do it (most orgs rent colo space in someone else's datacenter, they don't build their own). There's a reason AWS margins are so high (which leaves a lot of cost savings to be had when your workload isn't highly variable). Any questions, email is in my profile. I spent ~16 years building data centers, hosting environments, infrastructure, etc.
Many SaaS companies not only lack the ops experience needed to run their own infrastructure (which may be only problem of perception, for me running stuff on dedicated HW in colo center seems like less hassle than dealing with things like AWS) but also the common sense required to not over-engineer the scalability of their solution in the early phases (which falls squarely into the YAGNI teritory, as you can run surprisingly large stuff on two or three physical low-end 1U servers).
I thought Dropbox's revenue mainly comes from it's business clients - B2B is more $ compared to B2C although B2C might be more profitable as customers might pay the $10/1TB and not really use that much anyways)
Their paying users have increased, but the revenue per user has decreased (based on the S1...which I assume is because of enterprise deals).
Facebook was at $1/user/year in their S-1, Twitter was < $1.
From the SNAP S-1:
"We rely on Google Cloud for the vast majority of our computing, storage, bandwidth, and other services. Any disruption of or interference with our use of the Google Cloud operation would negatively affect our operations and seriously harm our business."
"We have committed to spend $2 billion with Google Cloud over the next five years and have built our software and computer systems to use computing, storage capabilities, bandwidth, and other services provided by Google, some of which do not have an alternative in the market."