[_ea1k]

They likely did anticipate it, but not how ferociously some of the cloud providers would pursue the strategy.

The Amazons of the world don't have to pay a fair price for the software that they use and also get to sell at exceptionally high prices.

TBH, that last part is still somewhat of a mystery to me. How did the market evolve to such a place that large infrastructure providers can command huge gross margins? Shouldn't that be a highly commoditized part of the supply chain?

[happytiger]

It’s because people misunderstand the way that companies buy software and purchase things. The social layer of “nobody ever gets fired for buying X” is what drives adoption. Companies like AWS sell risk management first, then software capabilities.

Not many companies are “big enough to sue” at a scale that you can roll your entire brand or operation onto and know it won’t be acquired or “private equitied” tomorrow, and so it consolidates down to the major players.

Those are the factors that count for enterprise buyers.

AWS can roll out an open source tool and get massive adoption because it’s rolling out an insured product, essentially. They often even have issues or less capabilities, but it comes with support and a assumption guarantee of general availability and so aggregates and reduces the risk for large buyers.

[_ea1k]

Yeah, that's fair, but there really should be a lot of companies that fit that criteria. There are a lot of large companies that offer hosting, but there seems to be little price competition and most are not signup-friendly in the way that AWS, GCP, and Azure are.

[cduzz]

The reverse ought to be a risk to manage as well.

Amazon is now large enough that they compete or think about competing in every profitable vertical out there.

If you're an enterprise in a profitable market, amazon's a competitor now or will be soon.