Economies of Scale in the Datacenter: Gmail is 100x Cheaper to Run than Your Own Server
Thursday, August 23, 2012 at 9:15AM
Todd Hoff in Strategy

Urs Hoelzle, infrastructure guru and SVP at Google, made a really interesting statement about the economics of scale in the datacenter:

We’ve shown that when you run a large application in the datacenter, like Gmail, you can, compared to a small organization running their own email server, you can save nearly a factor of 100 in terms of compute and energy, when you run it at scale.

My first thought was shock at the magnitude of the difference. 100x is a chasm crosser. Then I thought about Gmail, it's horizontally scalable using technologies that are following Moore's Law (storage and compute), latency requirements are lax, a commodity network is sufficient, and it can be highly automated so management costs scale slower than users. After that it's a simple matter of software :-) Oh, and developing a market where it's "cheaper to run a large thing than a small thing."

 

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