We stand to save $7m over five years from our cloud exit

David Heinemeier Hansson, co-founder of Basecamp and creator of Ruby on Rails, shared in an article that his company is planning to fully exit the cloud by the end of the summer and expects to save about $7 million in server expenses over the next five years by doing so.

He explained that they spent around $3.2 million on cloud in 2022, with about $1 million of that going to storing 8 petabytes of files in S3. The remaining $2.3 million is what they intend to bring down to zero this year. They plan to purchase around 2,000 vCPU per data center (they run in two data centers), and will spend $600,000 on hardware and $720,000 on power and bandwidth per year, which is much cheaper than their current cloud expenses.

Tip: He encourages other mid-sized SaaS businesses to benchmark their rental bills for cloud servers against buying their own boxes.