As far as chip shortages, it probably helps that Amazon makes its own chips. Microsoft could do the same rather than running out of capacity and blaming chip shortages.
Microsoft had to know that at some point they were going to run out of capacity. They should've either did something about it or let customers know.
AWS has outages all the time as well, but due to the way AWS structures its offering, those outages only affect a relatively small portion of their customer base.
Even when Microsoft was being open about Azure having difficulty getting Intel chips, AWS, GCP etc. were in the same position and just not really talking about it. From my time in AWS there were some other times when some services with specialised hardware came really, really close to running out of capacity and had to scramble around with major internal "fire drills" against services to recoup capacity.
Most people won't run in to these issues, the clouds all tend to be good at it, but they still happen.
There are also advantages of the economy of scale and brand recognition. The more customers you have the more the capacity trends smooth out, the easier it is to predict need, even if you're still stuck with uncertainty on the ordering side.
If anything, I’m surprised we can just spin up a few hundred instances out of nowhere and not run into capacity issues.
MS also makes all sorts of crazy deals and commitments, and I wouldn’t be surprised if being collocated with a strategic customer may lead to local shortages of resources.
IDK what chips you are talking about, all x86 (which I assume is most of their compute) is Intel or AMD. If they make their own they are only making the ARM instances.
It is true I can get an instance most of the time, but not if I need >16GiB GPU memory.
Spot instances exist just to try to turn over-provisions in to not a complete loss. You're at least making some money from your mistake.
They are constantly guessing at cloud capacity. Short, medium, and long term models with forecasting galore, all under constant recalculation based on customer actions (they literally take live feeds of creation/termination actions), and yes they also take in to account hardware failure and repair rates. Consolidating racks of equipment is a pain in the neck and tends to be avoided, unless you can safely live migrate away all instances.
They all build up various models, using all sorts of forecasting techniques. The longer range forecasts are involved in data center provisioning, along with other business analysis, market research, legal analysis etc. that helps define where future regions should be.
It's still a guess. They can't tell what the actual demand will be, and they can't tell what is going to happen with the supply chain (supply chain issues are the biggest nightmare for capacity planning teams). Sometimes they get it wrong.
The capacity management teams spend a lot of time and expertise to keep the company just sufficiently ahead of demand. It's a crucial part of keeping costs under control.
Anyway, capacity planning is very well understood in general but of course the devil is in the details.
At the moment the IT supply chain is pretty spotty and that affects my little IT firm up to the big boys.
When you buy Cisco + HPE + Dell or whatevs, you go to your reseller (me). I go to my distributor and they suck hardware out of Dell etc and take their cut and I install the gear and take my cut. Sometimes a disty thinks they can do reseller too. The thinking is that they can roll up two lots of margin and shave a bit. That's fine if you can actually do logistics and the "teeth arm" job too.
Clouds think they can go even further and sometimes they can and sometimes not. Now we have a sodding complicated resource on offer with a supply chain that is a bit random.
The whole hyperscale cloud premise is based on infinite availability of raw resources and that is complete bollocks. You can't hyperscale if you can't source stuff indefinitely.
Those Austrian mint filled choccy frogs became a thing for a while. I gave no idea of the exact numbers but presumably Austria supplied quite a lot of them for the UN forces and families in Cyprus in the '80s - they became a bargaining chip for a while. They came in a cardboard package with a lid coloured light blue with outlines of frogs and I think the main box was dark brown or black.
Yup. And a few of the OEMs have stopped talking about supply chain integrity. Many folks have observed more memory and power supply problems since the pandemic.
Wasn't the whole point of "the cloud" that these things shouldn't happen?
Too much capacity is money spent getting no return, up front capex, ongoing opex, physical space in facilities etc.
On cloud scales (averaged out over all the customers) the demand tends to follow pretty stable and predictable patterns, and the ones that actually tend to put capacity at risk (large customers) have contracts where they'll give plenty of heads-up to the providers.
What has been very problematical over the past few years has been the supply chains. Intel's issues for a few years in getting CPUs out really hurt the supply chains. All of the major providers struggled through it, and the market is still somewhat unpredictable. The supply chain woes that have been wrecking chaos with everything from the car industry to the domestic white goods industry are having similar impacts on the server industry.
The level of unreliability in the supply chain is making it very difficult for the capacity management folks to do their job. It's not even that predictable which supply chain is going to be affected. Some of them are running far smoother and faster and capacity lands far faster than you'd expect, while others are completely messed up, then next month it's all flipped around. They're being paranoid, assuming the worst and still not getting it right.
This is an area where buying physical hardware directly doesn't provide any particular advantages. Their supply chains are just as messed up.
The best thing to try to do is do your best to be as hardware agnostic as is technically possible, so you can use whatever is available... which sucks.