Actually, I don't think the decision is that shortsighted in this case. It could work out pretty well for a decade or longer. IMHO FedEx is likely to have a good run before the costs and risks of this decision start outweighing its benefits.

However, when the situation starts to become unbearable, how long will it take to rebuild the infrastructure and source talent? Another decade? Adding the startup costs for any possible rebuild, you're apt for a substantial net loss. So you're probably going to shy away from such a reintegration, while losses accumulate further, until this becomes unsustainable, putting the entire corporation at risk.

(The wise thing to do to mitigate financial impact may actually be starting the reintegration process right now.)

Will it? If they do this right it won't. There is a large cost running a data center. So long as long as there is competition they are better off with experts doing computers while they focus on logistics which is what they do well.

Of course they should make some effort to ensure there is competition. That means they are careful to ensure more than one provider exists even if it means taking a slightly higher priced option. Also contracts end early if the company is bought out. (that is if AWS, buys google cloud - see above about ensuring there are competitors in the market)

> Of course they should make some effort to ensure there is competition.

My guess is, we'll rather see some consolidation, like in every other segment. Which also means considerable expenses for the remaining players, who will experience increasing need to regain some by pricing. As theses players are sharing roughly the same boat, this will show quite naturally some characteristics of an oligopoly. At the same time, self-managed infrastructure will have become a rarity and costs of reintegration are prohibitive, which should allow for some elasticity in market prices. Also, any investments towards reintegration won't show results during the turn of current management, minimizing chances for this to happen, yet again. (This is not a level playfield anymore.)

$400m saved today in exchange for $500m 10 years from now sounds like a good deal financially!

Sometimes tech debt can be used instead of financial debt!

Mind that if you'd ever wanted to integrate again, this means buying land, planning infrastructure, building it, planning, obtaining and setting up hardware and software, hiring, training, defining and testing procedures, etc, as you're starting from zero again – and all this while the costs, which forced you to consider this move, are piling up. Odds are, you'll never do this and cloud providers will know this. The comparative costs are now not those of running your own infrastructure, but those of setting it up (again).

FedEx had very few on site people managing the hardware, it seemed like most work on hardware was done by the suppliers. There were also very few servers there and actually running, I think the software powering the enterprise took up a lot less than they expected.

Either way, I think you're spot on with the "training" part. FedEx was one of the first companies to raise significant capital and pursue a business dependent on technology. It also treated its people very well so relatively few left since the 70's. I think they just didn't train the next generation enough and they realized that those skills are disappearing rapidly because no college grads want to learn old & boring stuff and everyone who does know it costs a lot to keep (FedEx still heavily relied on COBOL when I left ~5yrs ago).

I deeply appreciate you sharing this context. What do you think about my wild predictions of disaster?

> how long will it take to rebuild the infrastructure and source talent?

How costly is it to maintain that level of talent? Do you think top server admin talent is screaming to work at FedEx or Amazon?

There are always going to be short sighted decisions. But a good design that would abstract away the fact that you are running on AWS or on-prem would pay dividends.

With a good design, there is always that implicit threat that they could move back to on-prem with little effort.

Convincing people future risks outweigh the short term gains is very hard. That goes for all things.

There are very likely voices, but they didn’t win this battle.

The optimize for the near term and after a while some other company optimizing for their near terms as startups stumble upon an awesome new product-market fit and upend the previous companies.

There is no grand plan, there's just evolution.