The $10 Million Cloud Exit

How the creators of Basecamp and HEY saved millions by leaving the cloud—and why they did it.

Industry Case Study: This analysis showcases 37signals' public cloud repatriation story. It serves as a benchmark for the potential savings achievable through strategic infrastructure ownership.

$10M+
5-Year Savings
90%
Cost Reduction
6 Mo
Payback Period
30%
Faster Perf

The Challenge

37signals, the company behind Basecamp and HEY, had been running on AWS since 2006. By 2022, their cloud bills had grown to over $3.2 million annually, despite their relatively stable and predictable workloads.

David Heinemeier Hansson (DHH), the company's CTO, realized they were paying a massive premium for flexibility they didn't need. They were renting commodity hardware at luxury prices.

The Solution

They executed a carefully planned "cloud exit" strategy. Instead of renting EC2 instances, they purchased their own Dell servers. Instead of expensive EBS volumes, they bought high-performance NVMe storage arrays.

The Investment

  • Hardware Cost: ~$600,000 one-time purchase.
  • Infrastructure: Colocation in two geographically distributed data centers.
  • Stack: KVM for virtualization, ZFS for storage, and open-source orchestration.
"The cloud is great for startups and variable workloads, but once you have predictable patterns, you're just paying a massive premium for flexibility you don't need."
— David Heinemeier Hansson, CTO

The Results

The math was undeniable. By moving off the cloud, they reduced their monthly infrastructure spend from ~$300,000 to less than $30,000.

The $600,000 hardware investment paid for itself in just 6 months. Over a 5-year period, the projected savings exceed $10 million.

Migration Timeline

Analysis & Planning

Initial business case development and hardware spec definition.

Procurement

Ordering Dell servers and securing colocation rack space.

Migration

Database replication, traffic shifting, and verification.

Cloud Exit Complete

AWS bills stopped. Full control achieved.

Sources

  1. Heinemeier Hansson, David. "Why we're leaving the cloud." HEY World, October 19, 2022. Link
  2. "37signals' cloud exit savings calculated: $1.5M over 5 years." The Register, February 22, 2023.
  3. Heinemeier Hansson, David. "We have left the cloud." HEY World, June 23, 2023. Link
  4. "Leaving the Cloud: The Finale." REWORK Podcast, Episode 66, July 12, 2023. Link

Could You Save 80% Too?

You don't need to be 37signals to benefit from bare metal. If you have predictable workloads, you're likely overpaying.

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