From the article:
> consumers hate metered billing. they'd rather overpay for unlimited than get surprised by a bill.
Yes and no.
Take Amazon. You think your costs are known and WHAMMO surprise bill. Why do you get a surprise bill? Because you cannot say 'Turn shit off at X money per month'. Can't do it. Not an option.
All of these 'Surprise Net 30' offerings are the same. You think you're getting a stable price until GOTAHCA.
Now, metered billing can actually be good, when the user knows exactly where they stand on the metering AND can set maximums so their budget doesn't go over.
Taken realistically, as an AI company, you provide a 'used tokens/total tokens' bar graph, tokens per response, and estimated amount of responses before exceeding.
Again, don't surprise the user. But that's an anathema to companies who want to hide tokens to dollars, the same way gambling companies obfuscate 'corporate bux' to USD.
Metered billing makes sense for B2B infrastructure-as-a-service type products (AWS), where as your company grows both you and the infra provider know the bill will grow manageably over time. Infra is set it and forget it.
But for AI in the context of point-solutions and on-the-job use cases, metered billing is a death blow.
In this context, metered is a massive incentive to not use the product and requires the huge friction of having to do a cost/benefit analysis before every task. And if you're using it at work you may even need management sign-off before you can use it again.
For a tool that's intended to amplify productivity, very few humans want to make a cost/benefit analysis 250 times a day whether it's worth $3 to code up a boilerplate or not. On metered billing, they just wont use it.
People don't have issues paying for metered electricity, heat, and water. AFAIK most people are aware of when they're wasting power/heat/water but don't go to extremes, e.g. don't run the shower constantly but don't shower with a bucket.
There is no "pay $25/month for unlimited electricity" option. And if there was, everyone would use that and all metered options would go broke overnight. Followed fairly shortly by the company offering unlimited flat-rate deals.
Which is what TFA describes, and is why there is no unlimited flat-rate deal for utilities. But that's a mature market that is not relying on growth for valuations, and isn't appealing to VCs trained on net/mobile/crypto bubbles.
I don’t know about you but where I live the electricity companies definitely offer a “flat rate” for electricity.
But those contracts are so much more expensive that virtually no one gets them.
Where do you live that you can get a flat rate for unlimited electricity? I've never heard of this (I live in Greece).
It existed when I lived in Pennsylvania, but it always had a “if you exceed this threshold consistently we will move you to a metered plan” conditional. More a way to plan your budget than truly unlimited.
Yeah, that's not unlimited. Useful data point, though. Potentially a solution for the AI companies?
Dunno if it counts because it's not unlimited usage for a flat rate, but in the Netherlands a lot of utilities like water, gas and electricity are billed at the same flat rate every month, then once a year they do a calculation and you get money back (or have to pay more if your usage was higher) based on actual usage.
I can't see any situation where true unlimited usage for a flat rate, even a wildly expensive and uneconomical one, would make any sense because as often happens you'd basically be incentivizing people to waste as much gas, electricity and water as they possibly can to "get their money's worth" or whatever, and we should be encouraging the exact opposite for those 3 things.
Same in the UK, it's mostly to spread out the seasonal cost.
Although here, if people get into debt they can be forced onto pre-payment meters where that's not an option, and the unit price is also higher. There's a lot of controversy about this.
I agree with you, that's why I can't believe it exists anywhere. What you mention is basically to reduce the costs of counting, and is still usage-based metering, just with a reasonable guess to make payment more frequent.
Power in Greece works the same way, except you (are supposed to) get the guess one month and the count the next (and pay the difference). In practice, they count less often than that.
> What you mention is basically to reduce the costs of counting, and is still usage-based metering, just with a reasonable guess to make payment more frequent.
That's not the motive where I live. There's basically 2 reasons: (1) customers (esp. those, often less well off, that resort to “money earned, money spent”) like the predictability of it; and (2) depending on the season spending changes significantly (heating, cooling), whereas salaries don't.
Usually the corrective amount is also paid out over a period of months if it exceeds X% of one month's spend.
Here in Norway, especially 10-20 years ago but still not uncommon today, you will find flats for rent with electricity included in the monthly price. Student housing especially.
We own an old 170 sq.m. semi-detached house, and the electricity bill for June was 20 euros. That's with all heating & hot water coming from electricity (heat pumps) and owning an EV that we charge at home.
That's the same for the UK but ultimately the cost is absorbed by someone, just not the tenant.
I work in heavy industrial manufacturing and we have flat rate contracts. In fact, we MUST use a minimum amount or we get billed a penalty.
In manufacturing, everything is about consistency.
Interesting. Is there an upper limit too?
People don't have stable or seasonal "token needs" or wants.
Nor do they have stable don't-give-me-any-better "answer quality" expectations from models. At least not yet.
AI model services don't have any version of the typical utility's geographical market protection or monopoly.
Worse, they have all been funded for massive loss-leader hyper growth, so to survive in the short term, they have to compete on who can raise and lose more.
Then looking into the long term, unlike the Uber's of the world, the point where a market will reach saturation, survivors finally "win", and margins can transition from negative to positive, keeps moving away.
I don't see any way in which utility bills are economically comparable to this situation.
The only "hope" the general AI service business has, is that at some point one of them pulls far enough ahead of the others that everyone else's economics collapse first.
Like a very high speed version of the centralization in advanced chip fabs. But with no profitability until the centralization happens. Brutal.
Those utilities are fairly easy to track in a way that digital services aren’t. Lights in my home consume energy at a consistent rate. Ditto for water coming out of the faucet; if I open it more, I can see it moving more water and costing more.
On the web, it’s not clear that one website is being massively more wasteful than another. From your perspective you’re engaging in the same behaviour (opening a website) but for reasons outside your control you may be spending more than intended.
I remember not having unlimited internet traffic at home and always having to worry. These days, I pay a flat monthly fee for internet access.
But leaving a light on 2x the time will equal very close to 2x the price.
Asking “what day is today” vs “create this api endpoint to adjust the inventory” will cost vastly different. And honestly I have no clue where to start to even estimate the cost unless I run the query.
Except of course that they do:
"Texas freeze raises concerns about ‘ridiculous’ variable rate bills" (2021)
HOUSTON, Feb 23 (Reuters) - In Spring, Texas, about 20 miles (32 km) north of Houston, Akilah Scott-Amos is staring down a more than $11,000 electric bill for this month, a far cry from her $34 bill at this time last year.
"What am I going to do?" Scott-Amos, 43, said. She was among the millions of Texas residents who lost power during several days of bitter cold that caused the state's electrical grid, operated by the Electric Reliability Council of Texas, to break down. "I guess the option is, what, I'll pay it? I just don't feel like we should have to."
<https://www.reuters.com/business/energy/texas-freeze-raises-...>
This instance involves variable rate billing systems, where the cost per unit use can vary tremendously. There are also stories you'll find where equipment issues (broken water or gas mains, malfunctioning electrical equipment, failure to terminate per-minute-billed telephone calls, etc.). I can remember the latter featuring in some compendium of records (possibly Guiness) for a family who hadn't realised that they needed to hang up the phone between calls and got hit with a staggering (at least for the time) bill. More recently, data and roaming charges tend to be culprits:
<https://worthly.com/most-expensive/expensive-phone-bills-tim...>
In all of these cases, a significant problem is that usage is all but entirely divorced from metering, and people have no idea of what their actual usage patterns are until "invoice therapy" arrives.
(A term I'm borrowing from a friend, though I'll note that monthly feedback cycles on what are typically hourly/daily decisionmaking patterns proves a poor systems control theory match.)
Utilities are infra-as-a-service.
The point is that infrastructure is non-optional, you're not going to decide not to use it, and you rarely switch (in the case of utilities you often CAN'T switch). You set it and forget it.
AI in the context of an end-user product or tool is not that (unless you're running the AI product company, where it becomes infra for you).
It's a blender or a kitchenaid mixer. Let's say companies gave those away for free but only charged metered fees to use them. If you had to pay $4 to blend something or run your mixer (and weren't sure if the tool would get it right the first time or you'd have to re-do it 5 times) you'd use them much less. They are optional.
You'd treat the decision to bake like a financial one. Nobody asks their spouse if it's okay to take a shower.
LLMs are not essential for survival.
Yet.
Ever.
My point is that many technologies which were once thought of as luxuries eventually come necessities. Socially if not physically.
Adam Smith of all people writes of this:
By necessaries I understand not only the commodities which are indispensably necessary for the support of life, but whatever the custom of the country renders it indecent for creditable people, even of the lowest order, to be without. A linen shirt, for example, is, strictly speaking, not a necessary of life. The Greeks and Romans lived, I suppose, very comfortably though they had no linen. But in the present times, through the greater part of Europe, a creditable day-labourer would be ashamed to appear in public without a linen shirt, the want of which would be supposed to denote that disgraceful degree of poverty which, it is presumed, nobody can well fall into without extreme bad conduct. Custom, in the same manner, has rendered leather shoes a necessary of life in England. The poorest creditable person of either sex would be ashamed to appear in public without them.
<https://en.wikisource.org/wiki/The_Wealth_of_Nations/Book_V/...>
Running water, sewerage, gas service, home postal service, electricity, automobiles, telephone service, Internet service, mobile phones, universal healthcare, and many other utilities were once considered luxuries but came to be recognised as essentials.
I don't need my linen shirt either. I'll be just fine, naked in the forest.
Jokes aside, I already don't live without my LLM. Rely on it too much. Though more for comfort than survival.
Naked in the forest is underrated, until the ticks and mosquitoes arrive ;-)
Fair points, I'll add that I'm not sold that LLMs will become indispensable. There's plenty of flashy tech which hasn't.
But of the past 20--30 years' or so offerings, it seems to have a reasonably high chance.
If you bring the LLM to the forest and prompt it for how to avoid the ticks and mosquitos it will most likely tell you to put a linen shirt on.
But what you're missing is imagine you could pay a flat fee for all your utilities... and that fee is quite low. And imagine a very competitive marketplace where the switching costs are basically zero. What do you think will happen?
There are utilities which offer a uniform-monthly-billing option. PG&E in California does so as "Budget Billing":
Budget Billing is a free program that helps you easily manage your monthly energy costs . We calculate your monthly payment amount based on your average energy costs over the last 12 months and adjust your payment amount each month, so that you don't have big spikes on your bill.
While it's not a savings program, Budget Billing helps you stay in control of your bill by avoiding seasonal bill spikes.
<https://www.pge.com/en/account/billing-and-assistance/financ...>
That’s not the same at all. That’s a personalized plan based on your usage but smoothed out over the year for predictable bills, in contrast with Claude/openai’s uniform $20/$200/mo plans. You can’t use as much electricity as you want in that PGE plan. You still pay for what you use.
If everyone’s usage was above the set rate they would include rate limits which is literally a usage limit, which they have proven to do.
So no in fact you do get X tokens for 20 dollars and off your usage is too high they would absolutely put a stop to that. It wouldn’t even surprise me if they have per customer rate limits.
Where is the distinction here, it isn’t an unlimited plan, the limit just isn’t communicated.
That's the default in Germany due to yearly meter reading.
It's not at all flat rate, though, as you'll settle the balance after the year like a tax filing (refund or back pay).
PG&E's programme also works with a re-balancing of payments to account for over- or under-utilisation. My understanding of recent changes to the system are that those adjustments themselves are also spread out over a number of months, again to increase overall predictability and avoid surprise billing.
Ahhh, hmmm, fair. The German approach to surprises is to take the tariff sheet that basically boils down to a flat connection fee + price-per-kWh (the meter counts in kWh), sometimes split over multiple counters for tariff's that distinguish between prime time and off-time consumption, and often coming in two or three variants which are chosen between based on what the counter says (they tend to bump the connection fee and drop the price-per-kWh above a yearly kWh threshold). Then the consumer goes to look at the meter whenever the consumer wants, calculates via simple delta (subtract baseline value from current counter value) how much has already been used in this measuring period, and compares to for example the previous year around the same time. Or if usage is sufficiently even across a year, one does some simple linear extrapolation ("x days have passed since the start of this metering period, y_start was the start counter value, y_now is the current counter value, z days long is the current metering period"->"z * (y_now - y_start) / x").
I assume the utility support would explain this way of calculating/predicting/tracking if one asks nicely.
The reasons for not smoothing out further than monthly payment intervals in a yearly measurement interval is AFAIK due to regulatory restrictions on credit/debt, and because this is more due to a metering process efficciency/overhead limitation than because they inherently want to offer these fixed/steady payments: you don't want to send out a meter reader more than about once a year, and doing it that often also conveniently spreads out seasonal variations letting the bill predictions(/estimates used for calculating the monthly payments that are due) work much nicer and easier to understand than some summer/winter split tracking.
Note this information is all about the default/baseline tariffs, which the local electrical energy seller (which is a distinct entity from the local electrical power/grid provider, who is the one that has the natural monopoly) can't refuse due to credit score or the like and which can't have any remotely long term/notice periods. Many tariffs are quite similar in style, though, due to the inherent limitations of yearly-read non-smart energy consumption counters.
Around now seems to be where finally you as a customer can demand upgrade to a smart meter which notably (from my understanding) gains the ability to live-report energy flux for 15 minute quantization/intervals, matching the European super grid's electricity market. A nice side-effect closely related to that market quantization is that these meters allow selling PV production to other units/properties nearby (at least where the connection/current path doesn't actually go through grid operator owned wiring, e.g. units in an apartment building) without having to pay grid fees on that energy sale despite the energy going through the meters instead of being sold through a behind-the-meter bypass feed/line. That "virtual" metering of the hyper-local PV energy sale makes it just much easier in terms of infrastructure, compared to some actual real-time load-balancing setup that somehow spreads an apartment building's monolithic PV array's power across multiple units's behind-the-meter breakerboxes taking care to not wastefully oversupply any one as backfeed would at best be compensated at about a third of the all-fees-included retail rate (it's about the same as the grid fee part that's payable by non-local buyers of electricity, both around 10ct/kWh) instead of 1:1 compensating the approximately 30ct/kWh buy-rate of some local apartment's meter. Also, less active infrastructure at a scale that doesn't afford on-site 24/7 staffing for monitoring and customer-side-uptime-enhancing redundancy features is always good. I'm counting a mere meter that only meters and doesn't steer/control electricity as passive infrastructure from the power flow's POV. Especially if it's built to fail in a way where power still flows but the metering/counting is broken, at least where there's more than just yearly reporting from the meter (and thus non-metering would be caught quickly).
Electricity uptime of this grade is something with perhaps underappreciated benefits: pretty much all but critical systems and those that run non-crash-safe software will not require a UPS, as power outages at least in urban areas (except those where local distribution systems drown in climate change flash flooding) happen once every few years, either due to larger-scale blackouts (entire city/metro/state) or from non-redundant local infrastructure dying of old age.
Imagine all your home appliances ran on magic instead of electricity, and you paid the magic company for each unit of magic used, except you had no idea how much magic each appliance needed to operate.
100,% this. PAYG bill anxiety is such a barrier that I will not use it AT ALL if I'm paying the bill. And even when my company is paying, I feel a need to be too careful as to negate much of the benefit. Raise the prices of the all-inclusive plans if need be. But don't make me use (or NOT use) the API for my day-to-day.
> and requires the huge friction of having to do a cost/benefit analysis before every task
That's what we're supposed to do, right?
So let's see if we can spend a few tokens to ask the LLM for a cost/benefit analysis of using an LLM to solve the problem. I'd bet we can trust the result...
Venice AI has a solution where I stake their Base ERC20 token, and in exchange I get a proportional amount of free daily-refreshing API access to a variety of high-powered open source models, besides the staking yield and free Pro subscription level access to their webapp.
It's great for free experimentation when coding apps that use API inference, it's actually motivating to build uses for it because it feels akin to a benefit that otherwise goes unused. Of course there is some price risk in holding their crypto token. After a large spike and drop in the first couple days, it's held steady for 6 months with a $2-$3 floor, possibly due to it having that baseline utility. Mentally, it's far more comfortable to me to stake a principal sum that I can wholly unstake in the future, than to spend on per-request fees.
Sigh, yet another greater fool shilling a get-rich-quick pyramid scheme run by a serial crypto scammer who's already been charged by and settled with the SEC for offering unregistered securities, and is still running pump-and-dump insider trading schemes.
You're just going to get the rug pulled out from under you, and shilling on Hacker News isn't going to prevent that, and is totally inappropriate and uncalled for in a serious discussion about the economics of AI.
VVV Token of Venice AI Plummets 50% Due to Insider Trading Suspicions:
https://www.binance.com/en/square/post/19617661216041
Did Venice Team Dump $5.7M Tokens After Coinbase Listing? Venice AI platform faces a new token-issuing and dumping allegation for $5.7M VVV tokens at the recent price after the Coinbase listing:
https://coingape.com/trending/did-venice-team-dump-5-7m-toke...
https://x.com/AmirOrmu/status/1886505621026984107
@AmirOrmu: Venice team issued themselves an additional $5.7M worth of new tokens RIGHT AFTER the Coinbase listing!
@ErikVoorhees, do you care to explain why?
They immediately sold $450K worth of $VVV using only this fresh address...
Wallet Address + Proof
SEC Charges Bitcoin Entrepreneur With Offering Unregistered Securities:
https://www.sec.gov/newsroom/press-releases/2014-111
A 2018 investigation by the Wall Street Journal alleged that Erik T. Voorhees's previous company ShapeShift had facilitated money laundering of $90 million in funds from criminal activities over a two-year period. Yet here you are shilling his latest get-rich-quick crypto scheme Venice AI.
How Dirty Money Disappears Into the Black Hole of Cryptocurrency. The Wall Street Journal investigation documents suspicious trades through venture capital-backed ShapeShift:
https://www.wsj.com/articles/how-dirty-money-disappears-into...
> Again, don't surprise the user. But that's an anathema to companies who want to hide tokens to dollars, the same way gambling companies obfuscate 'corporate bux' to USD.
This is the exact same thing that frustrates me with GitHub's AI rollout. Been trialing the new Copilot agent, and it's cost is fully opaque. Multiple references to "premium requests" that don't show up real-time in my dashboard, not clear how many I have in total/left, and when these premium requests are referenced in the UI they link to the documentation that also doesn't talk about limits (instead of linking to the associated billing dashboard).
They don't make it easy to figure out but after researching it for my Co. this is what I came to.
Microsoft's Copilot offerings are essentially a masterclass in cost opaqueness. Nothing in any offering is spelled out and they always seem to be just short of the expectation they are selling.But how much is one premium request in real currency, and how many do I have per month?
https://docs.github.com/en/copilot/how-tos/manage-and-track-...
300 or 1500 per month depending on plan. $0.04 per premium request i believe.
You should see how Microsoft does the PowerBI/ Fabric billing. Gotta get premium capacity and licenses and regular capacity and it's so bad.
There's two costs to copilot coding agent, there's the 1 premium request plus there's the minutes the agent runs for comes out of your runner limits for the month.
This is coding agent, the asynchronous copilot, not the agent chatmode in copilot plugins for vscode etc
Highly recommend getting the $20/month OpenAI sub and letting copilot use that. Quality-wise I feel like I'm getting the same results but OAIs limits are a little more sane.
I'm talking about this new agent mode https://github.blog/news-insights/product-news/github-copilo... for which as far as I'm aware there's no option to switch the underlying model used.
How do you link the openai sub to Gh copilot? I thought you needed to use OpenAI api
I often find Amazon pricing to be vague and cryptic, sometimes there's literally no way to tell ehy, for example, your database cost is fluctuating all the time
Yeah that. We moved to AWS using their best practices and enterprise cost estimation stuff and got a 6x cost increment on something that was supposed to be cheaper and now we’re fucked because we can’t get out.
It’s nearly impossible to tell what the hell is going where and we are mostly surviving on enterprise discounts from negotiations.
The worst thing is they worked out you can blend costs in using AWS marketplace without having to raise due diligence on a new vendor or PO. So up it goes even more.
Not my department or funeral fortunately. Our AWS account is about $15 a month.
Are you using separate accounts per use case? That's the only real way to get a cost breakdown, otherwise you have no idea what piece of infrastructure is for what. They provide a tagging system but it's only informative if someone spends several hours a month tracking down the stuff that didn't get tagged properly.
> They provide a tagging system but it's only informative if someone spends several hours a month tracking down the stuff that didn't get tagged properly.
The way to deal with this is with an org-level Service Control Policy that enforces the tagging standards.
A resource doesn't have the right tags associated with it? It can't be created.
https://docs.aws.amazon.com/organizations/latest/userguide/o...
Yeah we have many accounts. Hence why I know ours cheap. Difficult to break it down within the account as you say without tag maintenance.
> The worst thing is they worked out you can blend costs in using AWS marketplace without having to raise due diligence on a new vendor or PO. So up it goes even more.
Not a bug, a feature.
[dead]
Amazon pricing is nice if you compare it to Azure...
If your AWS costs are too complex for you to understand you need to employ a finops person or AWS specialist to handle it for you.
I am not saying this is desirable, but it is necessary IFF you chose to use these services. They are complex by design, and intended primarily for large scale users who do have the expertise to handle the complexity.
> If your AWS costs are too complex for you to understand you need to employ a finops person or AWS specialist to handle it for you.
The point where you get sticker shock from AWS is often significantly lower than the point where you have enough money to hire in either of those roles. AWS is obviously the infrastructure of choice if you plan to scale. The problem is that scaling on expertise isn’t instant and that’s where you’re more likely to make a careless mistake and deploy something relatively costly.
It's a good thing aws saves us so much money that we can afford to hire aws specialists.
If you plan to scale to that extent, then why do you not have the money to hire the people who can use AWS? At least part time or as temporary consultants.
This:
> The point where you get sticker shock from AWS is often significantly lower than the point where you have enough money to hire in either of those roles
makes me doubt this:
> AWS is obviously the infrastructure of choice if you plan to scale.
I'm wondering what the point of all of this is.
If you can afford the large fixed cost of vertical integration, it's always cheaper to do things yourself, so the sweet spot for using providers like AWS is scaling down, not up. A managed DB lets you hire a fraction of a sysadmin or devops person from AWS.
The moment you end up paying enough to AWS to hire a sysadmin, you basically are getting an antagonistic sysadmin from AWS, whose primary goal is to make as much money off you as possible. The incentives are not aligned.
> If your AWS costs are too complex for you to understand you need to employ a finops person or AWS specialist to handle it for you.
What a baffling comment. Is it normal to even consider hiring someone to figure out how you are being billed by a service? You started with one problem and now you have at least two? And what kind of perverse incentive are you creating? Don't you think your "finops" person has a vested interest in preserving their job by ensuring billing complexity will always be there?
> Is it normal to even consider hiring someone to figure out how you are being billed by a service?
Absolutely. This was common for complicated services like telecom/long distance even in the pre-cloud days. Big companies would have a staff or hire a service to review telecom bills and make sure they weren’t overpaying.
Paradoxically you are both right. Yes, the situation seems dystopian. Yes, hiring a finops person is a sound advice once your cloud bill gets big enough.
> Yes, hiring a finops person is a sound advice once your cloud bill gets big enough.
Is it, though? At best someone wearing that hat will explain the bill you're getting. What value do you get from that?
To cut costs, either you microoptimize things, of you redesign systems to shed expenses. The former gets you nothing, the latter is not something a "finops" (whatever that is supposed to mean) brings to the table.
You need to know what to optimise which means you need to know what you are spending on.
I did say it applies IFF and only IFF you choose to use these services, and if you have chosen to use these services you have presumably decided they are good value for money. If not, why are they using AWS.
Of course the complexity and extra cost of managing the billing is something that someone who has chosen to use AWS has already factored in, right?
The alternative is to not use AWS.
> IFF and only IFF
If and only if and only if and only if? :)
(also, while on the topic, I think a simple "if" covers it here, since the relationship is not bidirectional)
If the cost of hiring the finops person is less than the savings over operating without one then you hire one, if it isn't then you don't.
It's not baffling. They know what they are getting billed for, that's transparent. They don't understand WHY they are getting billed 6x of what they expected. The problem here isn't with AWS, the problem is they don't understand why their usage is at 6x.
> If your AWS costs are too complex for you to understand you need to employ a finops person or AWS specialist to handle it for you
At that point wouldn't it simply be cheaper to do VMs?
Yes, very likely, but then why are you using AWS at all?
I think a lot of people are missing a key part of the wording of my comment, that capitalised for emphasis "IFF" (which means "if and only if").
I am absolutely certain a lot of people would save money using VMs - or at scale bare metal.
IMO a lot of people are using AWS because it is a "safe" choice management buy into that is not expensive in context (its not a big proportion of costs).
But they're also simple and cheap if you're a "one man band" trying out some personal idea that might or might not take off. Those people have no budgets for specialists.
Pricing schemes like these just make them move back to virtual machines with "unlimited" shared cpu usage and setting up services (db,...) manually.
I'm 100% on team "just rent VMs and run the software on there". It's not that hard, it has predictable price and performance, and you don't lock yourself into one provider. If you build your whole service on top of some weird Amazons -specific thing, and Amazon jacks up their prices, you don't have any recourse. With VMs, you can just spin up new VMs with another provider.
You could also have potential customers who would be interested in your solution, but don't want it hosted by an American company. Spinning up a few Hetzner VMs is easy. Finding European alternatives to all the different "serverless" services Amazon offers is hard.
> You could also have potential customers who would be interested in your solution, but don't want it hosted by an American company.
Not happened yet. The nearest I have come to it was a requirement that certain medical information stays in the UK, and that is satisfied by using AWS (or other American suppliers) as long as its hosted in the UK.
I've worked in places where customers (especially municipalities in Germany) have questioned the use of American hosting providers. I don't know whether it has actually prevented a deal from going through (I wasn't close enough to sales to know), but it was consistently an obstacle in some markets. This is despite everything being hosted in EU datacenters.
Isn't the reason that even if it is hosted physically in the EU, if it is an american company the data is still not safe from american spy agencies?
Yeah, something like that.
Yes, definitely.
Most small business I have dealt with use AWS do just need a VPS. If they are willing to move to a scary unknown supplier I suggest (unknown to them, very often one that would be well known to people on HN) then I suggest AWS Lightsail which is pretty much a normal VPS with VPS pricing - it significantly cheaper than an instance plus storage, just from buying them bundled (which, to be fair to Amazon, is common practice).
My own stuff goes on VPSs.
> AWS Lightsail which is pretty much a normal VPS with VPS pricing
Except it is still Amazon and subject to the same weird billing practices. I once terminated a Lightsail instance and they kept charging me, claiming that I didn't terminate the static IP address associated with it. The IP address itself cost the same as the instance + IP address did.
Now, that would make sense in "real" AWS, but you'd expect it to be more straightforward with a simplified service like Lightsail.
AWS pricing is actually extremely clearly specified but it is hard to predict your costs unless you have a good understanding of your expected usage.
They have clear numbers for things, but it's not obvious how those numbers would map to what you're trying to run.
If I charged compute based on the number of micro-ops executed then that would be a clear definition, but the actual cost would not be something you could predict, as it would depend on what architecture of CPU you ended up running it on.
AWS is even more complicated and variable than that as for cloud storage you have to deal with not only the costs of the different storage classes, but also early deletion fees, access charges, etc. Combined it makes it impractical to work out how much deleting a file from cloud storage will save (or cost). Sure you could probably calculate it if you knew the entire billing history of the file and the bucket it is in, but do you really want to do that every time you delete a file?
While I don't know enough to say if this is intentional, as it could result from simply blindly optimizing for profit, this sort of pricing model is anti-capitalistic as it prevents consumers from truly making informed decisions. We see the same thing is the US healthcare system, where no one can actually tell you how much an operation will cost ahead of time. That creates a very inefficient (but very profitable) market.
Metering is great for defined processes. I love AWS because I can align cost with business. In the old days it was often hard and an internal political process. Some saleschick would shake the assets at a director and now I’m eating the cost for some network gear i don’t need.
But for users, that fine grained cost is not good, because you’re forcing a user to be accountable with metrics that aren’t tied to their productivity. When I was an intern in the 90s, I was at a company that required approval to make long distance phone calls. Some bureaucrat would assess whether my 20 minute phone call was justified and could charge me if my monthly expense was over some limit. Not fun.
Flat rate is the way to go for user ai, until you understand the value in the business and the providers start looking for margin. If I make a $40/hr analyst 20% more productive, that’s worth $16k of value - the $200/mo ChatGPT Pro is a steal.
Amazon is worse than this, though the AWS bait and switch is that you are supposed to save over the alternatives. So it should be worth switching if you would save more than the dev time you would invest in doing so right? But your company isn't going to do that. Because of opportunity cost. Your company expects to get some multiple of a the cost of dev time back, that they invest in their own business. And because of various uncertainties - in return, in the time taken to develop, in competition, etc - they will only invest dev time when that multiple is not small. I'm not a business manager, but I'd guess a factor of 5.
But that means that if you were conned into using infrastructure that actually costs more than the alternative, making your cost structure worse, you're still going to eat the loss because it's not worth taking your devs time to switch back.
But tokens don't quite have this problem -yet. Most of us can still do development the old way, and it's not a project to turn it off. Expect this to change though.
it's surprising that YC has a gazillion companies doing some ai infrastructure observability product yet i have to see a product that really presents me and the user easily token usage and pricing estimations which for me is the #1 criteria to use that. make billing and pricing for me and the user easier. instead they run their heads into evals and niche features.
>Why do you get a surprise bill?
You get a surprise bill because of surprise usage of services billed based on usage.
If you ask anyone how much water or electricity they use per month, the first thing they're going to do is look at last month's usage.
Estimating what you need ahead of time is a hard problem.
In fairness, AWS doesn't give you a lot of tools to help you measure and predict how many "units" you'll use outside of running your thing and measuring. On the other hand, running your thing and measuring is the defacto way to figure out how much of something you'll use.
Finally, there are AWS services like EC2 and RDS you can run at a fixed cost to help you stay within budget. Traffic/bandwidth is the only thing that comes to mind that you're pretty much required to use without a way to fix the cost (although you can get pretty close with bandwidth limits on EC2 interfaces)
That's like the introductory prices of the incumbent giant telecom here in Canada: he's $60/month for gigabit internet + phone + TV for 1 year + a $250 prepaid Visa gift card! Oh, you didn't want the bill for $300 on month 13?
> consumers hate metered billing. they'd rather overpay for unlimited than get surprised by a bill.
Standard packages are like insurance. Everyone pays more or less the same premium, but some claim more than others. On average people always overpay for insurance.
The upside is that it's a predictable cost for the users, and also means predictable cash flow for the provider.
IT IS GAMBLING
Caps lock are mostly unwarranted on hackernews but I am not the PC principal.
Like, lets have a real talk, shall we? Lets just assume that the topic we are discussing on that I am right and you are wrong, How can I even convince ya when you are showing so less of maturity...
And lets say that you are right and I am wrong, but the fact that you are being so bullish on the fact that you can't be wrong and bringing the "this is worse than reddit" and etc. can't make me take you serious and can't make me think your opinion is valid.
If you really want, I'd like to logically disect this stuff as adults using pure logic & not mere opinions.
Waiting for your response.
GOTAHCA?
Maybe GOTCHA?
You can set billing alerts and write a lambda function to respond and disable resources. Of course they don’t make it easy but if you don’t learn how to use limits what do you expect? This argument amazes me. Cloud services require some degree of responsibility on the users side.
This is complete utter hogwash.
Up until recently, you could hit somebody else's S3 endpoint, no auth, and get 403's that would charge them 10s of thousands of dollars. Coudnt even firewall it. And no way to see, or anything. Number go up every 15-30 minutes in cost dashboard.
Real responsibility is 'I have 100$ a month for cloud compute'. Give me a easy way to view it, and shut down if I exceed that. That's real responsibility, that Scamazon, Azure, Google - none of them 'permit'.
They (and well, you) instead say "you can build some shitty clone of the functionality we should have provided, but we would make less money".
Oh, and your lambda job? That too costs money. It should not cost more money to detect and stop stuff on 'too much cost' report.
This should be a default feature of cloud: uncapped costs, or stop services
I low key live in fear that if I die, my personal AWS bill will get out of control and consume my entire estate before probate court can award my assets.
I just don't use AWS for personal projects. I got stung once with a $100 bill. Never again. I just can't accept unlimited liability like that in my personal life.
I don't know why every single person here insists on budget based limits. What you want is resource based limits with throttling and a calculator that takes your resource limits to determine the averaged monthly bill and a traffic spike bill.
Then the goal would be to set the resource limits to something you are happy with.
Yes, this is a pain in the ass to set up and AWS will probably never implement this, but it is the correct solution.
Because infinite downside makes the EV of using AWS infinitely negative. The biggest risk of any business using AWS is that AWS bankrupts you.
Lambda has 1mil free requests per month, so there’s a chance it would be free depending on your usage. But still, it’s not straightforward at all, so I get it.
Perhaps requiring support for bill capping is the right way to go, but honestly I don’t see why providers don’t compete at all here. Customers would flock to any platform with something like “You set a budget and uptime requirements, we’ll figure out what needs to be done”, with some sort of managed auto-adjustment and a guarantee of no overage charges.
Ah well, one can only dream.
> but honestly I don’t see why providers don’t compete at all here
Because the types of customers that make them the most money don't care about any of this stuff. They'll happily pay whatever AWS (or other cloud provider) charges them, either because "scale" or because the decision makers don't realize there are better options for them. (And depending on the use case, sometimes there aren't.)
I do my test infrastructure with prepaid credit cards. If billing goes over, I just drop the account and start again.
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Freaking Gen Z. They always want transparent pricing and limitations on corporate greed.
What's funny is I'm a Xennial (1976-1983).
I've seen the games and grift plenty enough times to call it out immediately.
It is tiring, but its the same bullshit, different company.
Maybe it's because "i'm a GenXer", but i am both extremely confused by what viewpoint is being labeled here in a way that is supposed to be clearly explained by such a broad characterization that is statiscally less accurate than an astrological sign and disappointed that even on hacker news we have to filter through such garbage.
Oh, and yes, i believe cloud providers should be required to provide controls for users to easily limit their spend.
I am very far from being Gen Z and I agree that having the options to control costs is essential.
Last time I was looking into this, is there not up to an hour of delay for the billing alerts? It did not seem possible to ensure you do not run over your budget.
So you're okay with turning your site off...
This a logical fallacy of false dilemma.
I made it clear that you ask the user to choose between 'accept risk of overrun and keep running stuff', 'shut down all stuff on exceeding $ number', or even a 'shut down these services on exceeding number', or other possible ways to limit and control costs.
The cloud companies do not want to permit this because they would lose money over surprise billing.
Isn't that the definition of metered billing?
Cats doing tricks has a limited budget.
YES!