[skeeter2020]

>> 150M at 5B revenue is not great: that's 3% margin!

and yet everybody - including Microsoft - is in a big rush to sell us AI services, which could look an awful lot like a historical utility business. 3% will be a dream return in that scenario!

[monocasa]

AWS is essentially a utility and gets way better than 3%.

[mike_hearn]

AWS isn't a utility because utilities sell commodities for which you can switch to a competitor easily, as you're buying the same thing. There are companies selling similar products to AWS but none that sell AWS itself.

[monocasa]

Early utilities tend to not be built on standards. See how early electric utilities within a country or even a city couldn't agree on voltage, frequency, phase, or even AC vs DC.

[philistine]

The fact that electricity was quickly commoditized does not guarantee that AWS will commoditize.

[brianwawok]

S3 is. But obviously not all of it.

[hollerith]

Still, there is a difference of degree. The engineering cost of making one city's electrical grid compatible with the consumers of a different city's grid were much lower (even if one grid was AC and the other DC) than the engineering cost of moving from AWS to a competitor because electricity is not that complicated.

Also, I doubt anyone was referring to electricity as a commodity in the early days before the industry developed standards.

[risyachka]

Aws is closer to monopoly than to utility

[groundzeros2015]

A monopoly with at least 3 major competitors and which exists because it created a new thing, not because it controls a fixed shared resources.

[monocasa]

Most utilities are monopolies.

[bluGill]

most utilities are natural monopolies. The cost to run wires/pipes to my house are a significant portion of the cost to serving me, so you wouldn't run wires to my house in hopes that I buy from you later.