Between 2019 and 2021, Lyft is committed to pay AWS $300M, about $8.5M per month.
Additionally, Lyft recently extended the deal from $150M in January because of the complete and total trust they have in AWS. The amount is a large sum of money, but it’s a small amount for Lyft; however, that does not mean the cloud is expensive. Based on a Cloud Pricing Index, Lyft is paying for the equivalent of 250,000 virtual servers running for a year, which will differ greatly for other companies.
First of all, the amount Lyft is spending on AWS consists of only 5% of their revenue, which is not much for the company. Lyft’s net revenue in 2018 was $2.2B, which is about $183M per month. 5% of their budget on infrastructure is reasonable when compared to a recent survey conducted by 451 Research. 150 IT and procurement decision-makers were surveyed and 55% were spending more than 15% of their IT budgets on cloud.
Secondly, Lyft could have built their own private cloud but it would be far more expensive than the price they’re paying for AWS. Their demand on the ride-sharing service is completely random and incredibly difficult to plan for capacity. They need AWS’s auto scaling to be ready to fluctuate when needed in order to avoid overpaying for unused servers.
Finally, the fact that Lyft is willing to make this financial commitment to AWS shows just how much they believe in AWS’s ability to perform as an excellent cloud service provider.
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