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I think AWS and similiar cloud providers have a tough challenge for the long term. The big question is how cheap will computing get, and how will the demand of

I think AWS and similiar cloud providers have a tough challenge for the long term. The big question is how cheap will computing get, and how will the demand of that computing increase over time? If prices continue to decrease rapidly, it becomes very difficult to maintain large revenue growth, even with unit-volume increases. In 20 years, how cheap will core services like S3 and ec2 be, and how will AWS' revenue on those services compare to today? They are also developing a lot of AWS software that probably won't decrease in price over time. For example, over the past 30 years database hardware has decreased dramatically in price, but Oracle software licenses have not. AWS has a lot of services that are some combination of complex software and hardware components.

dogma1138 11y ago
Hardware hasn't really decreased that much not if you count what services you want to run these days on it compared to 10-20-30 years ago. If you just run a simple web-application sure it's much much cheaper today than it was in 2000, but as technology evolved that isn't enough for big business today, if you look at companies that still build their own servers then unless they have unlimited space the servers these days tend to be much more expensive and exotic hardware is more and more common (it's not that uncommon to see SQL/BI servers with quite expensive compute/GPU's these days, 5 years ago it was all those "IOPS accelerators" or "specialized" SSD's, in 5 years it will be something else). As far as looking at the price of S3 or EC2 in 20 years that's completely irrelevant because those services for the most part will be irrelevant in 20 years, yes their might have their own counterparts but it's not like you will still use the same services, just look at how drastically the way you build and deploy applications has changed in 10 years.
harigov 11y ago
I think it's a mistake to only look at margins. We should also look at economies of scale. In the future, as margins get lower, it is compensated by more customers. Also, whenever margins get lower, successful businesses tend to provide additional value and charge for it. It is already happening in cloud services. Few years ago, it was fully IaaS and now it's moving towards more PaaS. Who knows what will come next? I can already see so many things that could be done better, and that's just me.

dogma1138 11y ago

Hardware hasn't really decreased that much not if you count what services you want to run these days on it compared to 10-20-30 years ago. If you just run a simple web-application sure it's much much cheaper today than it was in 2000, but as technology evolved that isn't enough for big business today, if you look at companies that still build their own servers then unless they have unlimited space the servers these days tend to be much more expensive and exotic hardware is more and more common (it's not that uncommon to see SQL/BI servers with quite expensive compute/GPU's these days, 5 years ago it was all those "IOPS accelerators" or "specialized" SSD's, in 5 years it will be something else). As far as looking at the price of S3 or EC2 in 20 years that's completely irrelevant because those services for the most part will be irrelevant in 20 years, yes their might have their own counterparts but it's not like you will still use the same services, just look at how drastically the way you build and deploy applications has changed in 10 years.

harigov 11y ago

I think it's a mistake to only look at margins. We should also look at economies of scale. In the future, as margins get lower, it is compensated by more customers. Also, whenever margins get lower, successful businesses tend to provide additional value and charge for it. It is already happening in cloud services. Few years ago, it was fully IaaS and now it's moving towards more PaaS. Who knows what will come next? I can already see so many things that could be done better, and that's just me.