Client Overview
A gambling company approached us for consultation on cloud infrastructure. Their initial plan was to deploy their platform on AWS, attracted by the apparent advantages of public cloud solutions.
Business Model
The company aimed to launch a platform hosting various games with the following expectations:
- User Base: 20,000 users projected after marketing efforts.
- Free Trial Offering: Users could download up to 10 games, with each game sized between 500MB and 1GB.
- Conversion Goals: Expected conversion rate of free trial users to paid subscriptions was 15-20%.
- Subscription Revenue: Paid subscription priced at $20, with an estimated 4,000 paying users.
The Challenge
AWS charges heavily for traffic, which posed a significant challenge for their business model:
Traffic Costs
80% of users (16,000 people) would not pay but would still generate significant traffic by downloading up to 10GB each.
Revenue vs. Cost
While subscription revenue from 4,000 paying users would be $80,000, our analysis showed it wouldn’t cover AWS traffic costs, making the model unsustainable.
Our Solution: Hetzner Private Cloud
We recommended Hetzner’s private cloud due to its lower and more predictable costs, particularly for high traffic scenarios. While public clouds like AWS seem appealing due to scalability and flexibility, Hetzner offers significant cost advantages that become clear only after thorough analysis.