37signals Leaves the Cloud. Are You Next?

37signals – the company behind project management platform Basecamp – is extremely vocal about the value of Cloud services. And now, they’re leaving the Cloud for good.

In October 2022, the company started openly and publicly complaining about how much they spend on Cloud services. This was particularly aimed at AWS, who co-owner and CTO David Heinemeier Hansson accuses of ‘printing profits renting out servers at obscene margins’.

37signals has two core products; the signature Basecamp platform, and Hey – positioned as an “email killer”. Basecamp is now mostly running on owned hardware, but Hey is entirely operated in the Cloud, and always has been.

Hey is now at a relatively large scale. In the beginning, Public Cloud services like AWS granted the fledgling product a simple, “no-infrastructure” option. It allowed for headroom when demand was unknown, and provided the flexibility to simply call it a day if the product flopped.

But as it grew, this route became less and less viable – until at last in 2022, 37signals’ total Cloud spend had reached $3,201,564.

That’s $266,797 per month. After all cost-cutting and lean business practices.

37signals has realised what deeserve has been saying for a while now. Public Cloud services are not cheap. They’re flexible – but they’re not cheap.

Hey is a semi-major SaaS platform – but we’re finding that exactly the same thing is happening in our customer base, where there’s a perceived convenience and flexibility that seems to justify the cost, until you look at efficiency.

Public Cloud is pitched as computing power on demand. But, as Hansson observes, it’s really just “renting computers”. At a certain scale and service level (and the threshold is lower than you’d think), renting stops being the best option.

So, what’s the answer?

Private Cloud.

37signals is moving Hey to a Private Cloud configuration

Private Cloud services are the solution to this bloated, multimillion-dollar inefficiency. And here’s why 37signals is doing it.

• Dedicated hardware
• data centre management
• A single monthly cost (when financing equipment) or large upfront cost
• Upgradeable

They will have dedicated hardware that will run their product. Only their product. Nothing else. Computing space and power will not be shared with other companies or products, à la AWS.

37signals has full ownership, and a custom hardware configuration tailored precisely for their needs.

The best part about deeserve Private Cloud solutions?  There’s no upfront hardware cost. It’s all included in a single monthly service fee, just like Public Clouds are billed monthly. There’s no big capital investment, but you get all the benefits of dedicated hardware without having to develop your own infrastructure.

Speaking of which…

Developing a data centre on this scale would be major infrastructure. It’s not possible to reasonably build a highly secure, resilient facility like this yourself, even if you’re 37signals.

In our Private Cloud setups, it’s all provided and maintained as part of the service. But the data centre is as key to success as any piece of hardware installed within it.

Control, performance – and better outcomes for users

One of the biggest benefits of Private Cloud isn’t anything to do with the cost. Or the bespoke hardware.

It’s that you get to choose which data centres you operate from.

Public Cloud services cannot provide this. You get what you’re given; hardware, location, service level… You’re renting what they’re leasing, wherever that may be.

But take our Miami data centre, for example.

We work with a client that needs ultra-low latency – so we installed a Private Cloud at Equinix MI6 in Miami. It’s physically closer to their users, and this minimises latency.

And MI6 happens to be one of the best purpose-built data centres in the world.

Along with improved latency, choosing your data centre’s location means complete compliance with data residency laws. Take our London data centres – Volta and GS2 – which not only give customers the best possible connectivity and latency in the UK, they also make operations fully compliant with local data laws.

Read more: Data Centre vs. Self-Hosted: What Should Businesses Choose?

The benefits of Private Cloud are very real, and we’ve been opening more businesses to it as long as we’ve been providing it as a service. Now, with 37signals’ extremely public, transparent transition over to owned hardware, is it time for more companies to do the same?

Is Private Cloud right for you?

It’s a far more complex question than it seems to be on the surface.

Some smaller businesses, or incubator, startup-style enterprises might be better off with Public Cloud solutions in the short-term, while the concept is proven. But then again, this might not be possible due to the nature of their business, or where they carry it out.

We’ve written another post, titled “Does a small business need Private Cloud? The honest answer…” where we explore these scenarios in more detail.

But in larger entities, the benefits are undeniable – and if you’re finding that your Cloud computing costs are spiralling out of control, maybe it’s time to follow 37signals out.

Private Cloud solutions that make business sense

At deeserve, we build Private Cloud solutions for business – and our list of world-class data centres continues to grow. Our expertise has made us the trusted Private Cloud partner to some national and international businesses; but our tailored approach means that even small businesses can get the business-transforming benefits of Private Cloud.

There’s no upfront hardware cost – and you don’t need to supply your own hardware. We do it all for you, at a single monthly cost. Just like a Public Cloud solution – only cheaper, faster, and better in every way!

Want to learn more about Private Cloud for your business? Call us on 01509 80 85 86 or send your message to hello@deeserve.co.uk.

Posted on: 21st February 2023.