Our stack is open source.
> what difference does it make if its on-prem or offsite?
The difference is not where it runs, it's that you own our racks, rather than rent them. In the traditional cloud, you're renting. Other vendors who sell you hardware will still have you paying software licensing fees, so it never feels like you truly own it. We don't have any licensing fees.
Focusing on just this financial narrative you're weaving, what stops a bank from selling "virtual racks" that work financially the same as owning an Oxide rack, but it's just AWS?
$1m buys you 42U of, whatever. You're handed an AWS account you do not pay for, but it has the $1m worth of, whatever in it, in perpetuity. Maybe the bank even throws in some fakey market you can "part out" and "sell" your rack to, years later, at some "market price."
It seems like, the product - and maybe the experience of buying the product - is what is most important to Oxide. It's really interesting to me, because I cannot wrap my head around what this narrative is:
You guys are Apple of Racks. But minus the iPhone, because there is no monopoly here. So, Apple (Minus iPhone) of Racks. Is that it? It's the rest of their offerings, which without the iPhone monopoly effects, are Buying Experiences. It's like when people buy $10,000 Mac Studios to "run LLMs", which of course they are going to do like, zero to one times, because they are excited about the idea of the product. For the audience that needs to "run LLMs" they buy, whatever, or rent. But they don't buy Mac Studios. Just because people do something doesn't mean it makes sense.
Is the narrative, AWS Doesn't Make Sense? AWS makes a ton of sense, for basically everyone. Everybody uses it and pays up the wazoo for it. And there are good objective reasons AWS makes sense, at basically all levels. Who is fooled by, "AWS doesn't make sense?"
The problem with AWS isn't even that they are expensive. It's that Amazon is greedy. It could be cheaper, which is a different thing than being expensive. It matters because "AWS stays greedy longer than the average Y Combinator company stays private" is an interesting bet for an investor to take. They could decide to be less greedy at any time, and indeed, it did not take long after offerings of S3-like storage from others led them to simply reduce prices.
What that is telling me is, I could take $100m in funding, sell $1m "racks" of equivalent compute on the Rolls Royce of cloud infrastructure, making everything financially and legally and imaginarily the same as ownership, and then take a $300k loss, right? On each "rack", same as your loss? It's a money losing business, but here I am making the money losing very pure, very arby. Is this what you are saying customers want?
Clearly they want a physical rack. By all means, I can send them a big steel box that provides them that aesthetic experience. Cloudflare, Google, they do the physical version of this all the time: dumb, empty appliances that are totally redundant, because people ask for them. RudderStack, Weights & Biases, a bunch of companies come to mind doing the same thing in software, like so called Kubernetes Operators that literally just provision API keys but pretend to be running on your infrastructure. People ask for Kubernetes operators, they made them, but of course, they don't do anything. They are imaginarily Kubernetes operators.
The reason there are licensing fees and rentals and whatever is the enterprise sales pipeline, right? Enterprise sales is, give people want they ask for. People ask for a price that's below $X up front, so that's what IT vendors do, and then it turns out people are okay with some ongoing licensing fees, so there. That's what they do.
So what IS it?
I'm struggling to understand what you're suggesting here, to be honest. First of all, banks don't sell cloud compute, so no bank is going to do that. Secondly, what does "work financially the same" mean? These are fundamentally different products, AWS is a service, Oxide is purchasing hardware that you then own.
> $1m buys you 42U of, whatever. You're handed an AWS account you do not pay for, but it has the $1m worth of, whatever in it, in perpetuity. Maybe the bank even throws in some fakey market you can "part out" and "sell" your rack to, years later, at some "market price."
What would be the advantage to anyone in this arrangement? Why not just have an AWS account in this case?
> "AWS stays greedy longer than the average Y Combinator company stays private"
Just to be clear, we are not a yc company. But beyond that:
> The problem with AWS isn't even that they are expensive. It's that Amazon is greedy. It could be cheaper, which is a different thing than being expensive.
It is true that if Amazon dropped prices, then the "rent vs buy" equation changes for some customers. But there always will be some people for whom it makes sense to own, and some people for whom it makes sense to buy.
> RudderStack, Weights & Biases
Neither of these companies seem to sell general cloud computing? They also don't sell hardware? These seem like completely different businesses.
> So what IS it?
We sell servers. Customers buy those servers, put them in a data center, and get a private cloud. That's the business. Other folks are doing similar sorts of things, but they all tend to be integrating parts from various vendors. We believe that our product is of a higher quality, because we built the whole thing, from the ground up. Hardware and software, working together. There are other things that matter as well, but that's the big picture.
You're telling me it's important to people to "own" instead of "rent." Well I can manufacture an "Own" out of a "Rent": I write up a contract for my customer that says "$1,000,000 for 100 EPYC servers", I ship an empty steel box, the end user gets an AWS account which they cannot add anything to, and it has 100 EPYC server metal instances in it. I pay the bills in that account. Okay? Now I have created "owning" out of renting.
If we pontificate on the objective value of owning versus renting, such as the ability to sell the hardware, I can manufacture that too: you might want to sell your empty steel box 5 years later, and I will buy it from you for $300,000. Or maybe the value of owning versus renting is that owning is "cheaper" than AWS. Okay, I'll sell the rack for $500,000 instead of $1,000,000. Do you see?
The important part of course is, I didn't have to make any racks. I didn't have to write any software. I give people something they really, really want, AWS, and I give it to them in the shape of an "Own." Of course, your "Own" and my "Own" are different, but whose "Own" is more different from a typical IT purchaser? You guys know 100x better than me.
I agree that it sounds stupid though. That's BAD. If it sounds stupid to manufacture an "Own" out of a "Rent", and it is an arbitrage, and it also is something people like, that is BAD for you. If it sounds like something banks should not be involved in, that is BAD. Banks are involved in extremely lucrative businesses!
> First of all, banks don't sell cloud compute, so no bank is going to do that.
Ha ha, but this is what you do! You might not be a bank, but you are a $100m bank account. You're more bank than I am today. And you are selling something - you know, you say you sell a rack, and you say, "that's the business," and there are people on this thread - and this is not at all an unorthodox opinion - who are saying, what is really the material difference between cloud and on-premises compute, when the interfaces between the two look so similar?
A huge difference is "Rent" versus "Own" which is why we are talking about it and why you brought it up. But I am showing you that you can manufacture an "Own" out of a "Rent," and it would be interesting to see, well, should I take $100m and spend $200m on R&D with it (ha ha), or should I take $100m and directly fuel it into a flywheel of reselling AWS into a shape that people like, which is "Own" instead of "Rent"?
> Hardware and software, working together.
See it's stuff like this that says to me, "Apple (Minus the iPhones) of Racks." That is really your thinking. It's about buying experiences. You guys are answering this question, clearly, in your own rhetoric. Because if it was really about "Own" versus "Rent," a bank could do it.
The only reasons to use Oxide racks are that you get an all-in-one solution and they don't charge you a subscription fee, you only pay upfront for the hardware once. But if this company goes public one day shareholders will surely push for a subscription based licensing model.
I have yet to see the benefit of "custom software" for "custom hardware". To me it looks like a liability, if Oxide stops to exist tomorrow you'll be left with a hunk of metal which is a dead end. The software being open source doesn't change that, if you have enough manpower to support such software on your own then you can surely support any other more flexible solution.
I'm sure they'll find _some_ customers but they're going to be few and far between.
