Why do some like Reddit and Netflix use AWS to host, when self-hosting can be more economic?

Unlikely that self-hosting would be cheaper, both due to the fact that of the operations overhead, and due to the fact that of the utilization aspect.

We run from 12 various AWS data centers for redundancy and resiliency, and our footprint in each is really not that big. We share AWS functional staff with numerous other businesses in each DC, which indicates they can be more customized and far more economical than if we needed to have all those roles dedicated to simply Netflix.

We achieve utilization well over 50% on all our AWS hardware – because we rent it just when we need it, and provide it back off-peak. Utilization of 20% would be quite typical in self-hosted data centers. In addition, AWS manages the development space for us from a giant swimming pool. If it were our own data centers, it would be difficult for us to expand a contiguous cage of servers every year for growth, demanding discontinuous clusters of makers and all sort of challenges in networking, connection, security, etc

. In other words, Amazon focuses on offering infrastructure. They have actually established an immense quantity of knowledge, cost performances, and is committed to purchasing future facilities. This kind of expertise is expensive, has a considerable chance cost, and distracts from the primary company. Netflix can either dedicate the personnel and resources to running data centers or it can pay someone else whose main business is infrastructure.

John Ciancutti explained the reasoning for utilizing Amazon AWS on the Netflix Tech Blog site a few years ago: Four Reasons We Select Amazon’s Cloud as Our Computing Platform.

The factors he offered stay real, even today. And while the on-going upkeep costs of a recognized data-center might be less than Amazon AWS costs, it does not record the entire expense of running a data center.

The initial expenses, ongoing upkeep, and staffing costs would be quite high. Even if they averaged out to be less than Amazon AWS, Netflix would be giving up on the benefits outlined by Ciancutti which have a really genuine financial cost connected with them.