37signals makes Basecamp and the email service HEY. In 2022 it paid Amazon Web Services $3,201,564, about $267,000 a month. That was already an optimised bill, with long-term discounts. The biggest single item was file storage: about $908,000 to keep around 8 petabytes of files in Amazon S3, copied across two regions.
In October 2022 the company announced it would leave the cloud. Its CTO, David Heinemeier Hansson, laid out the math in February 2023. About $2.3 million a year went on everything except S3: app servers, databases, caches, search. To replace that, they planned a hardware order from Dell of around $600,000. Spread over five years, that is about $120,000 a year. Their eight racks in two data centers, leased through a hosting partner, Deft, already cost about $720,000 a year and had room for the new machines. So roughly $840,000 a year, versus $2.3 million in the cloud.
They finished moving seven apps, HEY included, onto their own hardware in the summer of 2023. In October 2024 he reported the results: the cloud bill was down from $3.2 million a year to $1.3 million, almost $2 million saved per year. The hardware ended up costing about $700,000, and the savings during the second half of 2023 had already paid for it. The ops team was the same size.
The remaining $1.3 million was all S3, locked into a four-year contract until summer 2025. The plan was to move nearly 10 petabytes onto their own storage too, bringing projected savings to "well over ten million dollars over five years".
- $3.2 million cloud bill in 2022
- About $700,000 of new hardware, paid back within 2023
- Cloud bill down to $1.3 million a year by 2024
- Projected savings: well over $10 million over five years, by the company's own estimate
Why it matters: Renting is great for spiky or uncertain load. For large, steady load, do the math: buying machines you'll use for five or more years can cost far less, and those are numbers you can check before you decide.