The archive · Developer & Business Tools · Financial decision · 2022–2025
37signals bets owning servers beats renting the cloud - and saves $2M a year
Bootstrapped Basecamp/HEY maker 37signals left AWS for its own hardware, cutting cloud spend from $3.2M to $1.3M a year and projecting $10M+ in savings.
37signals
What the business is
37signals sells Basecamp project-management software and HEY email, runs its apps on Rails, and publishes books, courses and podcasts on its remote-work, bootstrapped philosophy.
Starting capital：About $700,000 on Dell hardware for the migration (2022–2023)
How it started
37signals co-owner David Heinemeier Hansson announced in October 2022 that the company would leave the cloud, arguing that renting computers is mostly a bad deal for a medium-sized company with stable growth. The company had spent $3.2M with AWS the prior year and saw the flexibility premium as wasted insurance for predictable workloads.
What happened
The team migrated seven cloud apps, including HEY, off AWS onto its own Dell hardware in two data centers, using a criticality ladder that moved caching first, then databases, then job services. It spent about $700,000 on gear, recouped the cost during 2023 as long-term cloud contracts rolled off, and ran the migration with the same ten-person infrastructure team.
How it ended up
In October 2024 DHH reported the first clean year of savings: cloud spend had fallen from $3.2M to $1.3M a year, saving almost $2M annually, and projected five-year savings were revised upward from $7M to more than $10M as the company prepared to move its last AWS S3 storage to its own Pure Storage arrays.
Background
37signals, the bootstrapped company behind Basecamp and HEY, announced in October 2022 that it was leaving the cloud. Co-owner and CTO David Heinemeier Hansson argued that renting computers is mostly a bad deal for a medium-sized company with stable growth, pointing to a $3.2M-a-year AWS bill and more than $500K a year for HEY's managed database and search services alone.
The migration moved seven cloud apps onto about $700,000 of Dell hardware in two data centers, using a criticality ladder to reduce risk: caching first, then databases, then job services. The same ten-person infrastructure team handled the whole exit with no additional headcount.
In October 2024 Hansson reported the first clean year of savings: the cloud bill had dropped from $3.2M to $1.3M a year, saving almost $2M annually. The hardware was fully recouped during 2023, and projected five-year savings were revised from $7M to more than $10M once the last AWS S3 storage moved to owned Pure Storage arrays.
The company documented the entire playbook publicly, turning a cost decision into a widely cited case study on cloud repatriation economics for predictable SaaS workloads.
What has to be true
- Stable, predictable workloads never benefit from the cloud's burst flexibility, so the premium is pure insurance they kept paying for.
- Publishing real numbers, from the $3.2M bill to the $700K hardware and the payback timeline, made the decision credible and auditable.
- The team had the in-house operations expertise to run hardware, so the main cost of leaving was gear rather than new headcount.
- The savings compounded: once contracts rolled off, almost $2M a year flowed straight to operating margin.
What can be applied
When your workload is stable, the cloud's burst flexibility is insurance you keep paying for: do the buy-versus-rent math, because the savings can exceed what the cloud's sales pitch admits.
Aftermath
As of September 2026 the latest confirmed figures are from October 2024: cloud spend down from $3.2M to $1.3M a year, hardware recouped during 2023, and projected savings of more than $10M over five years after the S3 exit. Hansson planned to delete the AWS account in summer 2025, and 37signals continues to sell Basecamp and HEY while publishing its cloud-exit playbook.
Sources
- Why we're leaving the cloud
- Our cloud-exit savings will now top ten million over five years
- What 37signals' Cloud Repatriation Taught Us About AI Infrastructure
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