37signals reported about $1 million in savings by September 2023 after moving much of its infrastructure from Amazon Web Services (AWS) to servers it owned in colocation facilities. The company estimated the change would save at least $1.5 million a year, then reported a $1.3 million cloud bill for 2024—down from its original $3.2 million annual run rate—and projected savings above $10 million over five years. Those are company-reported results and projections, not independently audited figures.
What did 37signals spend before the move?
37signals reported $3,201,564 in cloud-service spending for 2022. Its breakdown covered AWS services for HEY and legacy applications, along with S3 storage and CloudFront content delivery. The company said it was already monitoring usage, rightsizing resources, and using commitments to manage that bill; this was not a comparison against an untouched cloud account. 37signals’ 2023 cloud-spend breakdown put HEY production workloads at $1,066,150, S3 at $907,838, and CloudFront at $66,742.
How did the savings add up?
In 2023, co-owner and CTO David Heinemeier Hansson said the migration had taken six months and that the company had saved about $1 million by September. He described at least $1.5 million per year as a back-of-the-envelope estimate for owning hardware rather than renting it from Amazon. The estimate should not be mistaken for a measured, audited annual net saving: it was a forecast based on the company’s expected costs and operating model. Hansson also said the operations team did not grow as a result of the move. His account of the 2023 migration described about $500,000 spent on two pallets of Dell servers, with 4,000 vCPUs, 7,680 GB of RAM, and 384 TB of NVMe capacity.
A 2024 update put total new Dell hardware expenditure at about $700,000. 37signals reported a $1.3 million cloud bill for 2024, compared with the original $3.2 million-per-year run rate, and forecast more than $10 million in savings over five years. Hansson said that fitting new equipment within existing rack and power limits helped the economics. The figures do not establish that the company had already realized the full five-year forecast. The 2024 update and its qualifications also caution that cloud and owned-infrastructure comparisons are not fully apples-to-apples.
Do these 3 things before closing this tab:
1Clear out junk files and repair common Windows errors2Fix the driver behind crashes, sound loss and screen glitches3Repair Windows errors before they cause bigger problems#1 Best Overall
What infrastructure did 37signals use instead?
The company bought Dell servers and placed them in two colocation facilities operated by Deft. It did not build or own the data centers. Its described software stack included KVM virtualization, Docker, and Kamal. The distinction matters: colocation replaces some cloud-provider charges with hardware ownership and facility costs; it does not make the facilities, power, network, or support free. 37signals’ FAQ and its 2024 infrastructure account describe the arrangement.
Was all of the cloud spending eliminated?
No. The initial move focused on compute and managed services; S3 storage was a separate, later stage. In a 2024 update, 37signals said its remaining cloud spend was for AWS S3 and estimated that service at nearly $1.5 million a year. On March 26, 2025, Hansson said the company still had almost six petabytes to transfer and was targeting June 30 to finish moving the data to Pure Storage. He also estimated $1.5 million for the Pure Storage hardware and less than $1 million in warranty and support costs over five years. That March 2025 update describes a plan and an ongoing transfer, not proof that the migration was completed. The latest first-party report identified here does not establish whether it finished after the target date.
Rank #2
Why this result may not translate to another business
37signals had stable growth, an existing two-site footprint, colocation support, and an operations team already managing its applications. Those conditions helped it use its existing rack and power capacity. A company starting without those advantages would need to price them in. The cloud also provided useful elasticity during HEY’s unusually uncertain launch demand, when signups could have been difficult to predict.
For a meaningful comparison, calculate total costs over the same period and for comparable capacity and reliability. Include:
What’s actually slowing this PC down?
Pick the symptom - the matching free tool is one click away.
Rank #3
- Cloud commitments and discounts, managed services, storage tiers, and data-transfer charges.
- Server purchases, replacement cycles, warranty, rack space, power, networking, colocation, and support.
- Staff time, utilization, redundancy, recovery arrangements, and the cost and risk of migration.
- How quickly capacity must be added and whether demand is steady or subject to sharp swings.
Infrastructure that is cheaper on a steady workload may be less attractive when demand is unpredictable or rapid capacity changes matter. The comparison is specific to a company’s workloads and constraints, not a universal verdict on cloud costs.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.What the reported savings do—and do not—show
37signals’ results show that a company with its scale, workload, staff, and existing colocation capacity reported lower cloud spending after buying and operating its own servers. They do not prove that every company would save the same amount by leaving the cloud. The figures were not independently audited, and the company itself cautioned against treating the comparison as fully equivalent. Its five-year savings figure was a projection, while the later S3 move remained unconfirmed in the latest report identified here.
Quick Recap
Best Value
Product prices and availability are accurate as of the date/time indicated and are subject to change. Any price and availability information displayed on Amazon at the time of purchase will apply.
