They're definitely a leader in the space, but its not like it isn't a commodity. Great, you've got a durable object store and virtual machines. I'm not Netflix, I'm not Reddit. I don't need to scale to a bazillian users, and even if I did, its going to be with Akamai and the whole damn site mostly static (I'm looking at you, Healthcare.gov).
So, yeah, AWS is awesome. But its not like others can't/aren't catching up.
Tomorrow AWS is a $10 billion sales business, with offerings that are 10 times more powerful at 1/3rd the cost that they are now. And that is what Bezos has his eye on.
You're not Reddit? The value proposition will continue to skyrocket for smaller entities too, and it will swamp most of the market. That is the Amazon model, and they're clearly going to stick to it. At scale (AWS is probably only 5% to 10% the scale it'll be in just five years), very few will stand a chance at keeping up.
No, the value proposition does not continue to skyrocket. If you are a well established digital property and know your load profile, AWS is prohibitively expensive "just in case" you may need to scale to thousands of virtual machines.
I've found their customer service to be great, but pathetic from a technical perspective (i.e. they're very nice and apologetic when shit goes south, but its still going to be a while before they figure out how to fix it).
And slowly eating up AWS? No. That's Digital Ocean eating the lower end of the market. Rackspace outsources their CDN to Akamai, and their Cloud experience is damn near abysmal.
Do you have a source? From conversations in my tech groups, it seems people are moving away from Rackspace. Not to AWS specifically. Either way, I wouldn't have made the statement originally as I don't have any proof and I'm curious if they both released active customer #s that I missed?
So, yeah, AWS is awesome. But its not like others can't/aren't catching up.