[devit]

... which is also wildly overpriced.

According to multiple sources, Internet transit in the US now costs less than 1$ for a 1 Mbps line for large deals, which translates to 1$ for 324GB, which translates to 0.003$ / GB.

Amazon charges 15-30 times that.

(it appears that traffic can be much more expensive in places other than the US and presumably Europe)

[utrex]

It may cost that much to buy that capacity, but it costs a lot more than that to run the large scale organizations (CAPEX/OPEX) that build and buy these services. You're not just paying for a pipe, you're paying for the corporation.

[kobayashi]

Exactly, I don't know why so many people seem to miss this. The charges may not reflect the cost of that particular service, but if one looks to the service as a whole, it's not that badly priced. Costs cover the infrastructure, which we reasonably expect to contain multiple redundancies, as well as a profit margin for the business.

[johansch]

> You're not just paying for a pipe, you're paying for the corporation.

You are paying their profit margin, yeah.

It is wildly overpriced, no matter how you look at it. Operating costs even when done on a much smaller and more inefficient scale than for AWS do not make the total cost for incremental bandwidth usage THAT much larger.

[cortesoft]

Are there any alternatives for the service that are cheaper, with the same reliability?

[chrismarlow9]

Don't bother, AWS defenders will continue to defend it and replace employees with a larger AWS bill and further lockin until they shoot themselves in the foot.

[jonknee]

A large AWS bill (which actually gets cheaper over time!) is much easier/cheaper to get rid of than employees. AWS also won't get recruited by a competitor and come into your office wanting a ton more money.

[chrismarlow9]

AWS is the employee that sits there and learns the industry and every inch of the system you have for 5 years, and then one day you wake up and they're not at work. You read the news that morning and they just got 50 million to do their version of your company, and way better than yours.

Or they start getting older, don't keep the skills sharp enough, and die off. Now you've got to painfully convince them to help you train a new employee to keep the show running, or pay 10 fold your savings hiring the smartest in the world to fix it. But the systems too big, and by the time it's on the "latest and most popular cloud architecture with proprietary systems", you're irrelevant.

But you're right, they make the companies current CEO/CTO look good by cutting costs in the beginning, so who cares right?

[grkvlt]

I think (based on your child comment too) that you're conflating AWS and Amazon. Amazon sells things and also allows you to sell things, and that creates a conflict of interest, which has apperently caused problems. I am unsure how much of the problem was direct maliciousness on Amazon's part, admittedly - I suspect naivete on the part of some marketplace users, imagining that Amazon would never sell the same product as them, or would never lower the price of a competing product. Certainly it would seem obvious not to try and compete with Amazon on price or availability, you will always lose eventually.

However, AWS is a different thing altogether - it is a set of services that can be used to run parts of your business. Now, if your business involves simply reselling those services, or is predicated the availability and pricing of one of those services being a major part of the value for a service you sell (i.e. the value you add is marginal, with the majority of the product or service's value residing in the service AWS provides) then you are again in a situation where AWS may also decide to offer the same service, and will probably be able to do so more cheaply and profitably.

Again, this would not be a malicious act or directed attack on your business through inside information, and it seems naiive to assume so. You must have been able to determine a market existed and a need could be fulfilled profitably by providing this service, there is no reason a company like AWS could not reach the same conclusion with its vastly larger amount of resources. The possibility of this sort of thing happening should have been determined during due diligence and market analysis anyway, so it should not be a surprise if it happens.

But companies in traditional lines of business using AWS to save money, or using AWS to build a product where the value provided to the customer is inherent in the service provided, not the infrastructure used, are going to be fine. Nobody worries about the electricity company stealing your idea for a product run using electricity...

[balls187]

Hasn't really impacted Netflix and pretty much every other customer using AWS.

[grantc]

Mainframe Marty shows up.

[azinman2]

What's the alternative?

[faizshah]

Centurylink has a pretty formidable IaaS offering, it's very well priced and they charge very little (comparatively) for bandwidth. The only problem is their storage solution is extremely expensive but using S3 or soon Backblaze B2 as a storage layer is good enough for me.

[grkvlt]

So you're saying S3 is the alternative to S3 ... ?

[faizshah]

I said their IaaS is a cheaper alternative to AWS IaaS with the exception of their S3 alternative. I suggested B2 is the cheapest alternative to S3 do you have a suggestion?

[kordless]

The Intercloud.

[guimarin]

You're right, AWS just breaks even with their pricing.

[vacri]

> charges 15-30 times that.

I think you're going to be absolutely furious when you find out what the component costs of a bottle of any random drink is.

[Spooky23]

A few years ago, an enterprise network I helped run with about 40k users at several hundred locations cost something like $30-35 per user/month to operate. We had strong incentives to price below what an MSP would charge and beat them on 2 occasions.

About 40-50% of that cost was circuits and transit. The vast majority was tied up in labor and equipment costs. If I making money on the whole stack with the market control that AWS has, I would want at least 60% margins on the business -- it's not like locked in customers have easy options.

[Retric]

1 Mbps * 2 days = 21.6 gigabytes so sure you could transfer a lot of really stale data, but if latency is important the prices are dramatically higher. You also often end up paying for both the upload and download side if your need to regularly do large transfers.

[miraswitch]

My startup is working on this problem. We are working on an IaaS cloud designed for high-bandwidth users, with much lower pricing than amazon.

[rgbrenner]

Careful. My previous startup was a storage company that competed with Amazon and Google when they were charging 0.10/gb and I calculated it should be around 0.02/gb. A few months after launch, they both realized it too and dropped their prices. Leads dried up overnight.

The high prices seem to persist until one day they don't.

[miraswitch]

Yea, we considered this - but if Amazon and Google compete with us I'll consider it a personal success :)

[rgbrenner]

They compete against you whether they know you exist or not because your customers/prospects know Amazon/Google/etc exists.

It only takes one of the large players to break the pricing stalemate, and overnight they'll all follow to keep their position in the market.

[vidarh]

I sort-of agree with you, but in this case I believe it will persist for years to come, as they have faced competitors charging far less for bandwidth for years already and pretty much ignored it.

[dexterdog]

I live and love AWS but I never understood why they don't tier bandwidth charges per costumer.

[hsod]

what does "overpriced" mean in this context? "overpriced" compared to what? is there another company offering a similar service for a lower price?

[devit]

Compared to marginal cost.

There are companies offering prices much more similar to cost, for example:

- Hetzner.de servers/colocation offers additional traffic at 1.39 EUR/TB = 0.00158 $/GB

- DigitalOcean offers 1TB traffic with $5/month instances = 0.005 $/GB

[gtremper]

The price of something is determined by how much people are willing to pay for it, not the marginal cost. We don't pay people based on the marginal cost to keep them alive.

[kuschku]

Actually, in many jobs, we do. That’s why several countries have defined a minimum wage, and why so many people in society work minimum-wage jobs.

[eru]

In America. There are countries without minimum wage that do just fine. (Singapore, and eg pre-2014 Germany.)

[kuschku]

And the current German minimum wage is still only in effect in some industries, and in those no one worked below minimum wage before anyway.

It’s done literally nothing.