Internal tech Talk for SeatGeek 2021

1. The Economics of
Microservices
Phil Calçado | @pcalcado
https://philcalcado.com
(redux)

2. Disclaimer:
this talk is
from 2017

3. What was happening
in 2017 again? 🤔

6. The
Competition
Us
• Thousands of engineers
• Can hire all over the globe
• Often Greenfield product
and/or systems
• Lots of experience at web
scale
• Existing infrastructure to
leverage
• ~150 engineers, Berlin-
only
• Every recording label we
signed came with
contractual obligations
• Fiver years old legacy
Rails application running
Rails 2
• Lots of smart full stack
engineers on their first job
• No infrastructure—couldn't
use cloud because of EU
law

7. faster velocity was our
only competitive
advantage

8. what are we
going to do? 😱

9. https://philcalcado.com/2015/09/08/how_we_ended_up_with_microservices.html
yadda, yadda, yadda…

11. a tech startup life
often goes like this…

16. maintaining a
shared large
codebase
is really hard

17. not the topic of
today’s talk, but just
ask app-platform,
or…

24. Some companies
Some other
companies
• Adopt the new
architecture without
any problem
• Immediately see an
increase in velocity
• Might keep the
monolith “forever" but
it isn’t part of the
critical path anymore
• Spend more time in
infrastructure than
delivering value to the
business due to excess
services
• Any meaningful feature
requires changing a
boatload of services
owned by different
teams
• Can’t make people stop
adding new things to
the monolith

25. why do some
companies have a
better time than
others doing this? 🤔

26. borrowing some
tools of thinking

28. Firms exist when the transaction
cost of doing something within the
fi
rm, even with all its overhead, is
lower than than cost of doing
things through a marketplace of
free agents.

29. “[this works well until] the costs of
organizing an extra transaction
within the
fi
rm become equal to the
costs of carrying out the same
transaction by means of an
exchange on the open market or
the costs of organizing another
fi
rm"

30. back to software
engineering

31. transaction
cost
“just add it to
the monolith"
“extract into a
service“
first service

32. transaction
cost
“just add it to
the monolith"
“extract into a
service“
first service
leap of faith
{

33. when people say
“reverse Conway”
they mean…

34. shame
shame
shame

35. transaction
cost
“just add it to
the monolith"
“extract into a
service“
inverse conway
If there’s really no
other way, I guess…
}

36. “just add it to the
monolith"
“extract into a
service“
life uh… finds a way
“add to unrelated
existing service my
team owns“

37. making the “wrong"
thing expensive only
gets you so far

38. making the “right”
thing cheaper is
what matters in the
long run

39. transaction
cost
“just add it to
the monolith"
“extract into a
service“
first service

40. transaction
cost
“just add it to
the monolith"
“add to/
extract into a
service“
desired state

41. back to economics

42. "For example, McDonald's can produce
both hamburgers and French fries at a
lower average expense than what it would
cost two separate
fi
rms to produce each of
the goods separately. This is because
McDonald's hamburgers and French fries
are able to share the use of food storage,
preparation facilities and so forth during
production."

43. monoliths benefit
from economies
of scope

44. microservices
benefit from
economies of
scale

45. unpacking
“transaction cost”
for SOA

46. https://philcalcado.com/2017/06/11/calcados_microservices_prerequisites.html

47. so… do I need good
answers for all these
questions before
adopting services?

48. nope.
remember, you have a
business to build

49. (mandatory slide)

50. 1. Experimentation
2. Checklists and standards
3. Copy & paste
4. Libraries & Tools
5. Platform
my five-step
playbook

51. 1. Experimentation
2. Checklists and standards
3. Copy & paste
4. Libraries & Tools
5. Platform
my five-step
playbook

52. 1. Experimentation
2. Checklists and standards
3. Copy & paste
4. Libraries & Tools
5. Platform
my five-step
playbook

53. 1. Experimentation
2. Checklists and standards
3. Copy & paste
4. Libraries & Tools
5. Platform
my five-step
playbook

54. 1. Experimentation
2. Checklists and standards
3. Copy & paste
4. Libraries & Tools
5. Platform
my five-step
playbook

55. 1. Experimentation
2. Checklists and standards
3. Copy & paste
4. Libraries & Tools
5. Platform
my five-step
playbook

56. most organizations
will fold before
getting to #4

57. but the most
important advice
from business
literature…

58. "Most companies have it
all wrong. They don't
have to motivate their
employees. They have to
stop demotivating them."

59. ?