SEO giant Ahrefs says on-prem setup costs $400M less than cloud

A popular SEO tools developer, Ahrefs has revealed that its decision to use own hardware over the AWS cloud will save them $400 million over three years.

In a blog post titled “How Ahrefs Saved US$400m in 3 Years by NOT Going to the Cloud,” the company’s data centre operations execs, Efim Mirochnik gives a detailed breakdown of how running their services on-prem compares to running them on AWS.

Based on his calculations, their current cost per server per month including server acquisition cost is $1,500. In contrast, Mirochnik believes that the company would pay $17,557 per equivalent server on AWS. Some of the costs included in his calculations include the cost of electricity, internet service provider's charges, IP Transit costs, dark fibre charges, and the cost of operating internal network hardware.

And this, Mirochnik notes, is despite the fact that AWS doesn’t provide an EC2 instance with the number of cores Ahrefs have. So, he based his calculations on comparing the cost of one Ahrefs server with two EC2 instances of AWS.

Mirochnik also added that some of the cloud costs such as networking costs are rough estimates. There is also the chance that the cloud costs could be lower since AWS provides discounts for users who sign up for multiple years of service.

That said, Mirochnik is certain would be operating at a loss if all its services were hosted on AWS. “Ahrefs wouldn’t be profitable, or even exist if our products were 100% on AWS,” he wrote.

Mirochnik then pivots in his post to try and answer the question of whether other organizations should consider shifting back to on-premise.

“It is complicated to leave a cloud once you are there,” Mirochnik wrote. However, the operations exec believes that the cost savings should be enough motivation to consider the move.

He notes that unlike in the past when all the best talent had been scooped by big tech companies such as Facebook, Google, and Amazon, the massive tech layoffs mean professionals who can move workloads from the cloud back to on-prem are now more easily accessible.

“Big companies, FAANG [Facebook, Amazon, Apple, Netflix and Google] in particular, vacuumed the job market for many years. They had been hiring engineers to run their enormous data centres and infrastructure, leaving only a few for smaller companies.”

“But with the mass layoffs in Big Tech in recent months, this may be an opportunity to re-evaluate the approach to the cloud, consider a reverse migration from the cloud, and hire seasoned professionals of the data centre world,” he wrote.

Ahrefs is not the first company to admit to saving money by opting for on-prem over the cloud. 37Signals CTO David Heinemeier Hansson has in the past talked about how pulling from the cloud would save his organisation $7 million.