Zynga is often in the news because gaming is hot and Zynga has been, and continues to be, a successful gaming company. What’s different here is the story isn’t about gaming nor is it really about Zynga itself. The San Francisco gaming house with a public valuation of $2.5B was an earlier adopter of cloud computing and they built this massive business that ended up going public on AWS. That’s hardly noteworthy these days. Some absolutely massive companies like Netflix have made that same decision.
What’s different here is back in 2012 press reports covered the Zynga decision to move from an all cloud deployment model to using their own data centers. The move was broadly covered in the industry press with example headlines like Zynga Gives Amazon Cloud the Slip, and Zynga Cloud Case Study: the Journey to a Real Private Cloud. This decision has often been referenced as evidence that returning to on premise deployments when a company achieves very high IT investment scale is the right decision. This never seemed very credible to me but I understand the reporters perspective. A slightly more realistic but still incorrect interpretation is to reference this move as evidence that stable workload could be more economically hosted on premise. These days, there is more data available and it’s fairly easy to show that “being at scale” requires order 10^6 servers, deep investments in server and networking equipment and the software stacks above, and massive investments in the software stack that manages these resources. I’ve taken a run at most of those questions and offered my perspective in the last two talks I have done at re:Invent AWS Innovation at Scale and Why Scale Matters and how the Cloud is Different.
The news of the Zynga move has largely faded as more and more companies commit to the cloud. Yet, I kept watching this case closely because it is an unusual case where a nimble, start-up culture company with deep cloud experience decided to build their own private deployment with as many of the characteristics of the cloud as possible with a goal of being more economic.
This week more news came available when Robert McMillan of the Wall Street Journal wrote For Zynga, A Journey from Cloud to Home — and Back Again. In this article, Zynga is reported to have spent over $100m on a private cloud infrastructure and yet decided to return to the cloud all in. This decision is partly interesting because the previous move was so well publicized but mostly because Zynga has incredible visibility into both the on premise and public cloud world since they have run both at very high scale for several years.
The article quotes Zynga CEO Mark Pincus during the last investors call “There’s a lot of places that are not strategic for us to have scale and we think not appropriate, like running our own data centers. We’re going to let Amazon do that.” The articles continues by saying “The company Wednesday said it would shut its data centers and shift its computing workload back to Amazon, as part of $100 million in spending reductions.”
This announcement is interesting because Zygna has a very large infrastructure investment just as most large enterprises have. And yet, even with that large infrastructure investment, they still elected to move to fully to the cloud. What was an example that challenged cloud economics at the very high end of the scale, has now become an example of a company with a deep understanding of both cloud and on premise deployments at scale, deciding to fully commit to the cloud.
Of course, there is room for argument saying that the Zynga business has been through change and, of course they have seen change. What business hasn’t? In fact that’s part of the point. Cloud deployment make rapid change, scale up, scale down, and redeployments easy. In the Zynga case, they are now more deeply invested in mobile gaming with different compute requirements. A related potential pushback might be to point out that Zynga is under financial pressure. But, again, what business isn’t under financial pressure? In fact, I view the decisions made under business and financial pressure as perhaps the most informative. When a business with massive on premise and cloud deployments and deep skills in both needs to be even more nimble and frugal, the direction they take is particularly interesting.
I admit to a cloud bias but it’s really good to see another substantial company fully commit to cloud computing.