The Glacier posts generated much discussion that revealed some non-intuitive ideas about Amazon Web Services.

  • AWS doesn’t care about profits on Glacier. They have other reasons for offering a cheap archive service.
  • Glacier is based on S3. They do some things, like spinning down disks, using old disks, advanced erasure codes, special low-power controllers, high-density enclosures etc. to drive costs down.
  • Powered down disks. That’s it.
  • It’s a wildly over-provisioned group of servers/disks. Only a few can be powered on at any time.
  • It’s tape. No evidence for that from vendors and Amazon denied it, but . . . .

Other than the first and last arguments these are saying, in different ways, Glacier is justifiable based on power and power provisioning savings. Remember Glacier is still, after the recent price cuts, 1/3rd the price of S3.

What data do we have on power and power provisioning?

Mighty power rangers
From a Google paper, Power Provisioning for a Warehouse-sized Computer:

Typical datacenter building costs fall between $10 and $20 per deployed Watt of peak critical power (power for computing equipment only, excluding cooling and other ancillary loads) [25], while electricity costs in the U.S. are approximately $0.80/Watt-year (less than that in areas where large datacenters tend to be deployed).

That translates to ≈10-20 Watt-years is equal the cost of provisioning one Watt.

The paper, The Cost of a Cloud: Research Problems in Data Center Networks from Microsoft, with now-AWS architect James Hamilton as a co-author, presented a table breaking costs down further:
Data Center Costs

A later paper from July 2012, Battery Provisioning and Associated Costs for Data Center Power Capping from UCSD researchers, uses more recent data:
Screen Shot 2014-05-06 at 2.09.36 PM

These sources are in rough agreement on one point: the cost of power and power provisioning – including UPS, cooling, wiring etc. – is less than half of the total cost of a data center. Even if power and power provisioning were free, the savings would be only 40-50% of the total data center expense.

The StorageMojo take
We can rule out power savings as the sole driver of Glacier pricing. AWS must save money on the infrastructure side as well.

Unless, of course, AWS is irrational. Then all bets are off.

StorageMojo’s assumption is that AWS is rational: they want every service to make money, and given Amazon’s low margins and Mr. Bezos’ finance background, they have to. But it can be rational to have a money-losing service, as long as the service covers all the variable costs and makes a contribution to the fixed costs.

Could Glacier be a money-losing service? Cost accounting is a dark art, but typically a business will only offer such a service – dry cleaners laundering shirts for instance – if there’s customer demand and they’ll lose business if they don’t offer it. The key: cover your variable costs and make a contribution to your fixed costs.

Is someone else offering cheap cloud archiving that AWS is worried about? Readers?

Courteous comments welcome, of course.