Hi. Please take my oppinion with a grain of salt, as I might be biased since I'm a founder at a competing service.
In recent years, there was a significant amount of startups/bootstraped companies that tried to make application deployment easier, similar to Heroku. A lot of them were trying to get as much users as possible using a very generous offering. A lot of the times, this use-growth was fueled by a VC money, and the only metric that mattered was user/customer growth.
But then came the "cooling" at the private markets. VCs are looking not only at the user-growth, but also at the cash flow. A lot of the very generous offerings that were possible only thanks to the VC funding will eventually disappear.
I believe that what's currently happening with Heroku will happen to a lot of other Paas/BaaS startups. They will need to transform to a cash-flow positive business. Similarly to what Heroku is transforming to (a "cash cow": https://en.wikipedia.org/wiki/Cash_cow).
A lot of other PaaS providers will need to increase their prices to stay cash-flow positive. A portion of them will need to cancel or reduce the generousity of their free offereings.
The margin of these companies is usually possible thanks to 2 things:
- the infrastructure resources they provide is slightly (10-100%) more expensive than the underlying infrastructure they run you workloads on
- they use more cost efficient hardware (e.g. databases running on 3rd gen SSD disks) to run your workloads.
Since these companies are renting raw hardware, on which they run your workloads (and are not using cloud-provider-native services, such as RDS), they need to hire experienced operators able to run and manage those workloads in production. This (for obvious reasons) is not exactly easy, and requires a lot of experienced talent with operational experience.
Hiring those people is very hard, as these experts are not usually available on the market.
This leaves us with with the obvious problem:
Are the operators of the given PaaS provider really able to run your production workloads? Are they able to to withstand all the issues that may arise?
Don't get me wrong. There definitely are companies (the most succesful) able to hire very capable talent (such as https://supabase.io), but this definitely isn't the case for all of those PaaS providers.
And I believe that these companies will need to increase their prices (and be less lucrative for their customers) or changes their business model.
This is something that we at stacktape.com built our business case on. We took a different path. We just wanted to make the existing (AWS) offerings 2 orders of magnitue easier to use, so that any developer (withou Cloud or DevOps experience) can use them productively.
We're not running your workloads for you. We are just making AWS services (run by experienced operators) significantly easier to consume (97% less difficult, so that any developer can do the job). For that, we're charging 30%->20% of the AWS infrastructure costs managed by us premium. This also means that you are not restricted to our platform, but can easily extend your infrastructure by any AWS service (using AWS CloufFormation or AWS CDK).
AWS offers areasonably generous free tier, and Stacktape won't charge you for any resources withing the free tier.
We're launching our v2 soon (~1-2 weeks), and if the offering we have sounds interesting, we'll be very happy to hear your thoughts.
Comments
Hi. Please take my oppinion with a grain of salt, as I might be biased since I'm a founder at a competing service.
In recent years, there was a significant amount of startups/bootstraped companies that tried to make application deployment easier, similar to Heroku. A lot of them were trying to get as much users as possible using a very generous offering. A lot of the times, this use-growth was fueled by a VC money, and the only metric that mattered was user/customer growth.
But then came the "cooling" at the private markets. VCs are looking not only at the user-growth, but also at the cash flow. A lot of the very generous offerings that were possible only thanks to the VC funding will eventually disappear.
I believe that what's currently happening with Heroku will happen to a lot of other Paas/BaaS startups. They will need to transform to a cash-flow positive business. Similarly to what Heroku is transforming to (a "cash cow": https://en.wikipedia.org/wiki/Cash_cow).
A lot of other PaaS providers will need to increase their prices to stay cash-flow positive. A portion of them will need to cancel or reduce the generousity of their free offereings.
The margin of these companies is usually possible thanks to 2 things: - the infrastructure resources they provide is slightly (10-100%) more expensive than the underlying infrastructure they run you workloads on - they use more cost efficient hardware (e.g. databases running on 3rd gen SSD disks) to run your workloads.
Since these companies are renting raw hardware, on which they run your workloads (and are not using cloud-provider-native services, such as RDS), they need to hire experienced operators able to run and manage those workloads in production. This (for obvious reasons) is not exactly easy, and requires a lot of experienced talent with operational experience.
Hiring those people is very hard, as these experts are not usually available on the market.
This leaves us with with the obvious problem:
Are the operators of the given PaaS provider really able to run your production workloads? Are they able to to withstand all the issues that may arise?
Don't get me wrong. There definitely are companies (the most succesful) able to hire very capable talent (such as https://supabase.io), but this definitely isn't the case for all of those PaaS providers.
And I believe that these companies will need to increase their prices (and be less lucrative for their customers) or changes their business model.
This is something that we at stacktape.com built our business case on. We took a different path. We just wanted to make the existing (AWS) offerings 2 orders of magnitue easier to use, so that any developer (withou Cloud or DevOps experience) can use them productively.
We're not running your workloads for you. We are just making AWS services (run by experienced operators) significantly easier to consume (97% less difficult, so that any developer can do the job). For that, we're charging 30%->20% of the AWS infrastructure costs managed by us premium. This also means that you are not restricted to our platform, but can easily extend your infrastructure by any AWS service (using AWS CloufFormation or AWS CDK).
AWS offers areasonably generous free tier, and Stacktape won't charge you for any resources withing the free tier.
We're launching our v2 soon (~1-2 weeks), and if the offering we have sounds interesting, we'll be very happy to hear your thoughts.