On 5/9/07, William Pietri <william(a)scissor.com> wrote:
Anthony wrote:
I've suggested before that a lease of servers
would make a lot more
sense than all those capital expenditures, and this is a good example
of why that's true.
Could you say more about that?
When I've looked at server leasing before I could never make the cost
numbers work out, as the server lease arrangements were either a) from
high-end companies that charged a premium for their gear, or b) were
through private lease-what-you-want companies that charged too much for
custom deals. But I haven't done mass gear purchases in a while, so I am
probably out of touch with how you whippersnappers do it these days. :-)
You could never make the cost numbers work out compared to what? A
lease is pretty much always going to cost more in the long run
compared to an outright purchase price, as you're essentially paying
to borrow money from someone. But, especially as interest rates are
currently low, this type of purchase is perfectly suited to a
corporation like Wikimedia which is experiencing such dramatic growth.
Let's say the major fundraisers come twice a year. Let's say a lease
can be had for 1/30 the purchase cost per month over 30 months.
That's a really high estimate, based on Dell and rounding the cost up,
and surely the WMF can do better. Let's assume fundraisers of
$40,000, $100,000, $167,000, $300,000, and $500,000 (taken from the
financials, rounded, and estimating in order to break up into
semi-annual figures). Assume capital expenditures of $35,000,
$55,000, $85,000, $150,000, and $275,000 (same methodology).
With a lease, you spend $7000, $18000, $35000, $65000, and $120000
each half year. With the extra cash flow you can easily hire a couple
of extra staff members plus pay a few consultants for "one-time"
things like security audits. From what I've seen of MediaWiki I have
little doubt the code contains serious security flaws, and I think we
all know that the system has numerous DOS attack points.
The downside of a lease - there's no capital left over at any stage of
the game. But considering that Wikipedia's value is currently about
99.9% goodwill anyway, I wouldn't call that much of a problem.
Anthony