On 5/9/07, William Pietri william@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