[archildress]

These types of agreement are relatively common in some manufacturing environments, and are often called "take or pay." In essence you're reserving capacity.

What's interesting to me about this one is that I fundamentally believe that both:

- Cloud computing will be increasingly commoditized, with lower cost providers emerging in the next 3-5 years

- More companies of scale will go back to building their own infrastructure as a cost savings project.

For Amazon, I think the incentive is as much about locking in revenue as it is locking in "demand" - helps with their demand planning of how much more to build out.

[300bps]

What does cloud computing mean to you? It seems like you are thinking of traditional “virtual machines in the cloud”.

When I think of AWS for new development I mostly think of serverless technologies like Lambda, DynamoDB and even serverless RDS. It’s going to be difficult for any company to do it for themselves cheaper.

To me, AWS is about the exact resources needed for a task blinking in and out of existence for the exact number of milliseconds they’re needed. I don’t know how anyone will compete with a cheaper on-prem solution.

Azure seems similar.

[jjav]

> for a task blinking in and out of existence for the exact number of milliseconds they’re needed

Right, in cases where the capacity needed is so low that "blinking out of existence" is a frequent scenario, it is indeed cheaper to rent only those CPU-milliseconds that are needed.

But as usage grows, it will fairly quickly exceed the cost of just having dedicated servers.

[sofixa]

> Cloud computing will be increasingly commoditized, with lower cost providers emerging in the next 3-5 years

There are plenty of alternatives ranging from just IaaS ( you rent VMs) to more advanced PaaS/SaaS type "clouds" (e.g. Scaleway have managed databases, Kubernetes, FaaS, CaaS). There are some fairly decent ( in terms of coverage, cost, features) providers out there, outside of the big three.

However they are in an entirely different market similarly how Tata Motors, PSA Group and Lamborghini aren't competitors. Yes, both are used to move people around, but the scale and features aren't even close. There are so many managed services on AWS it's impossible to list them all coherently. Whatever you could need, it's probably there. Digital Ocean or Scaleway or similar are perfectly fine when you're smaller, more technically advanced, with more time available, higher failure tolerance. They can make sense to use, but aren't for every use case.