Cloud on fire: The burn rate on Tumblr’s big backend is building fast

Above: From Flickr user David Stanley

Tumblr has been spending several million dollars per month on web hosting, sources tell VentureBeat.

“You wouldn’t believe the amount they are spending just to keep the site up and running,” said a source familiar with Tumblr’s expenses. “It’s crazy considering they don’t have a real business model figured out yet.”

The work of scaling Tumblr’s backend architecture, which now supports 15 billion page views a month, is a massive job, according to the blog High Scalability. The post compared the blogging platform’s challenges to massive sites like Twitter and Facebook, both of which dwarf Tumblr in terms of employees and funding.

Once you dig into the size of the technical challenge Tumblr is handling on a daily basis, it’s not as surprising as our source made it seem. Tumblr is growing at 30 percent each month and, as High Scalability points out, has 500 million page views a day, a peak rate of ~40k requests per second, ~3TB of new data to store a day, all running on 1000+ servers.

The unique follower model set up by Tumblr presents a one-two punch:

• Data-rich posts full of images, music, and video, much like Facebook
• A Dashboard that lets users follow along in a manner similar to Twitter, with real-time updates coming from hundreds of blogs they follow.

This massive amount of media is all stored on Amazon web services.

“This is the fascinating thing about building a startup these days,” said Bijan Sabet of Spark Capital, an investor in Tumblr who sits on the board, speaking with VentureBeat by phone. “With the elastic cloud, you can reach a fairly massive scale on a limited amount of capital.”

But when a startup goes from being a scrappy, fast growing company to a massive, top twenty property on the web, the cost of having a third party like Amazon supporting your infrastructure can begin to outweigh the benefits. “Building our own data center is something Tumblr will do at some point,” Sabet said. “We raised a significant amount of capital with these challenges in mind.”

Tumblr raised $85 million in September of 2011, back when it had just 13 billion pageviews a month, a round that valued the company at $800 million dollars. “This is not a company with a big burn rate,” Sabet insisted, pointing out that Tumblr still had money left over from the $30 million it raised in December of 2010.

Sources say that with 60 employees and mounting costs on the back end, Tumblr’s total burn rate is several million dollars a month and growing fast. That would still give it plenty of breathing room, however, at least two years based on their last funding.

“Initially the site was designed on a pretty traditional LAMP stack,” Blake Matheny, Tumblr’s director of platform engineering told VentureBeat by phone. “But we reached the end of what that technology could offer us.” The company now has 20 full time engineers on staff. “When we had half a dozen guys, all we could do was fight fires,” Matheny said. “Now we can begin to do some planning for the long term.”

Tumblr is experimenting aggressively with new revenue streams, recently rolling out highlighted posts, which let users pay $1 to attach stickers to individual blog posts. But so far founder David Karp has adamantly resisted the idea of injecting any traditional brand advertising into the site.