5 ms·

As a shareholder, hopefully never. Building infrastructure and platforms has three wonderful benefits: * Good customers, where good is defined as smart and wil

by crabasa 10y ago

As a shareholder, hopefully never. Building infrastructure and platforms has three wonderful benefits: * Good customers, where good is defined as smart and willing to spend money. Going up the stack means dealing making sacrifices on both of those dimensions. * Less complex products that stay relevant longer. Amazon builds legos and leaves the task of putting them together to others. The assembly can create value, but also adds complexity that becomes difficult to manage over time. S3 was launched in 2006 (!) and I'd bet will outlast high-order products like Box and Dropbox. * Scale. Building apps means targeting smaller sets of customers. At Amazon's size, it's not clear what kind of application software would be a better use of their resources than simply continuing to solve platform problems.

iamacynic 10y ago
i don't think i agree. i think they're moving up the chain to plug weaknesses in their model. 1. good customers - infrastructure customers are not good customers. they are fickle and extremely price sensitive, which is tough to do on a super capital intensive business like hosting, even on amazon cloud's insanely high cost. 2. less complex products - i don't understand how there is there anything about amazon's cloud that says "less complex" to you. have you ever used it? it is automating thousands upon thousands of things you have to do by hand, and it breaks sometimes. 3. scale - every single application anyone has had success with is a sitting duck. i think amazon is the real new microsoft, with all of the anti-trust implications that insinuates. google only delivers information, amazon delivers nearly everything in the physical world (including hosting, the ultimate "physical good" that nobody thinks is.). good thing jeff bezos owns the washington post.
- placeybordeaux 10y ago
  It feels like amazon's fundamental strength is dealing with price sensitive customers and running margin business with extremely thin margins.
  - nebabyte 10y ago
    That's one of their strengths - a company as large as Amazon can easily spread itself into multiple concerns without endangering its core business. They can even shut out competition by adding new Prime benefits for various services. Even the risk is mostly offloaded to existing companies. All Amazon has to do is wait to see what is viable/sustainable, figure out how to undercut their competition (likely their own customers on AWS), and essentially reach out and take "the rest of the pie" from those customers. It's brilliant.
    - deepnotderp 10y ago
      But high level applications customers aren't usually price sensitive, if Amazon tries to compete with its customers and fails, then they'll leave, to someone like Google cloud.
    - 013a 10y ago
      It is brilliant. But their track record doesn't seem to be all that great. They add services to Prime like Video and Music, but their competition is still around. No one is leaving Netflix or Spotify. More importantly, the main reason to pay for Prime is shipping. The rest are value-adds that might dissuade someone from unsubscribing, but I just don't think many people think "Wow, I need to pay for Prime Video!" Their SaaS offerings on AWS are the same. Do people get excited about Quicksight, WorkDocs, or WorkMail? Not that I've seen. They have customers. People use them. But compared to their crown jewels; EC2, S3, SQS, Lambda... they're nothing. Amazon will inevitably try to expand upward. But I see it being as successful as Prime Music or Amazon Cloud Drive. Its too much "can we do this" and not enough "should we do this".
- user5994461 10y ago
  > they are fickle and extremely price sensitive Not at all. Most customers couldn't care less about money. There are numerous people who are price sensitive, the amateurs who are running a test app and complaining that digital ocean is cheaper, then move to the weirdest hoster they could find because that's only $2 a month. These are NOT AWS customers.
  - iamacynic 10y ago
    > Not at all. Most customers couldn't care less about money. you're out of your mind. customers at the high end care MORE about money, not less. the company spending $1 million/month on AWS is desperately looking for ways out. DESPERATELY. their entire business is being held hostage by amazon. jeff bezos has them by the balls and is squeezing harder and harder by the day. they have hired consultants to do the analysis, they have hired operations VPs to get them out, but they are failing. they are failing, and shoveling even more money to AWS every week, or their business goes dark. they are doing this because one side of their business (doing stuff) is outpacing their intelligence on the other side (paying for infrastructure to do stuff). this is the genius of amazon. this is why they are successful. amazon can arbitrage this opportunity better than anyone else currently. how do i know? i compete with amazon and talk to customers on a weekly basis. they are desperate. they woke up one day and are are now sending their entire profit margin to jeff bezos. every single CFO is thinking about it. how panicked are they? you could cut their bill in half and they still wouldn't do it. they're scared, like a deer in the headlights. they don't know what to do. what if they make a wrong decision? ohhhhh my goddddddddd but... let's do nothing and keep our jobs. that's the reality. meanwhile, s3 can go down for half a day, and amazon doesn't even really have to acknowledge it. becuase what are the customers going to do? MOVE? LOL! you might as well ask them to build a time machine. that is real. people live in that reality. sometimes against their will. people care about costs, and try hard, and all of those nice things, but they will soon be losers because jeff bezos is just BETTER at business than they are. jeff bezos is literally being paid by the people he is about to put out of business at the application level, and they're happy to pay him to do it. it's amazing. it truly is. here's the problem: more people know how to click a button on console.aws.amazon.com than to migrate and operate an entire site. people simply do not have the skills. they just don't. they don't know how the internet actually works, but they're operating a business on the internet. they're dumb. amazon capitalized on that, good for them. maybe the era where needing to actually knowing how the internet works is over. i don't know.
- quanticle 10y ago
  >i don't think i agree. i think they're moving up the chain to plug weaknesses in their model. Moving up the chain doesn't plug weaknesses. It dilutes your focus and increases the number of competitors gunning for you. The single worst business decision that Larry Ellison made was to acquire SAP. He looked at SAP's product, building on top of Oracle's databases, and thought, "Hey, that's value I can capture." The effect of that acquisition was to dilute Oracle's focus on its core product, which, in the long run, probably hurt Oracle more than its acquisition of SAP helped.
  - sfdghjkl2345678 10y ago
    Oracle never bought SAP. You are WRONG.
  - travem 10y ago
    Are you thinking of the acquisition of PeopleSoft by Oracle[1]? SAP are not owned by Oracle. [1] http://www.oracle.com/us/corporate/press/017124_EN http://www.oracle.com/us/corporate/press/017124_EN
nickbauman 10y ago
Google App Engine is a product, not just a collection of APIs or even an application. The closest thing Amazon has to that is Elastic Beanstalk, which resembles Heroku closely.
- omgbear 10y ago
  It's a pretty shallow clone of even Heroku.
  - discodave 10y ago
    And Heroku is a thin layer on AWS. :)
- feedjoelpie 10y ago
  If Beanstalk could compete with Heroku, no one would use Heroku.
nebabyte 10y ago
Even LEGO sells mass-produced kits. And sure, kids predominantly play with LEGOS by building their own things. But when it comes to toys, LEGO isn't the only thing out there. And which helicopter would you think kids play with - the make-believe one that they have to wave around and pretend flies, or the mass-produced quadcopter that actually flies? Just because Amazon does what it does now well doesn't mean it can't or shouldn't keep expanding. Quite the opposite - if they're able to optimize processes so well at the levels they work at, why not move up to higher levels and continue the growth?
- paulddraper 10y ago
  The analogy falls apart because Legos blocks are not made of smaller Lego blocks. AWS does put things together. E.g. Autoscaling, RDS, Spot Fleets, OpsWorks Nothing you couldn't do with their more basic pieces. But these are still reusable and composable.
- iainmerrick 10y ago
  And which helicopter would you think kids play with - the make-believe one that they have to wave around and pretend flies, or the mass-produced quadcopter that actually flies? Mostly the Lego one. :)
  - sitharus 10y ago
    The pre-built one only flies. The lego one can be a submarine, turn in to a rocket, shoot lasers, arrack your brother... much more fun! Same is true of AWS, I'm just older.
lstroud 10y ago
Do we not consider the storefront and payment processing offerings business software? What about Aurora, Redshit, and EMR competing directly with Oracle and SQL Server? Or, their replacement of a number of web application servers? Seems like they started to climb that vine a while back.

by crabasa 10y ago

iamacynic 10y ago

i don't think i agree. i think they're moving up the chain to plug weaknesses in their model. 1. good customers - infrastructure customers are not good customers. they are fickle and extremely price sensitive, which is tough to do on a super capital intensive business like hosting, even on amazon cloud's insanely high cost. 2. less complex products - i don't understand how there is there anything about amazon's cloud that says "less complex" to you. have you ever used it? it is automating thousands upon thousands of things you have to do by hand, and it breaks sometimes. 3. scale - every single application anyone has had success with is a sitting duck. i think amazon is the real new microsoft, with all of the anti-trust implications that insinuates. google only delivers information, amazon delivers nearly everything in the physical world (including hosting, the ultimate "physical good" that nobody thinks is.). good thing jeff bezos owns the washington post.

placeybordeaux 10y ago
It feels like amazon's fundamental strength is dealing with price sensitive customers and running margin business with extremely thin margins.
- nebabyte 10y ago
  That's one of their strengths - a company as large as Amazon can easily spread itself into multiple concerns without endangering its core business. They can even shut out competition by adding new Prime benefits for various services. Even the risk is mostly offloaded to existing companies. All Amazon has to do is wait to see what is viable/sustainable, figure out how to undercut their competition (likely their own customers on AWS), and essentially reach out and take "the rest of the pie" from those customers. It's brilliant.
  - deepnotderp 10y ago
    But high level applications customers aren't usually price sensitive, if Amazon tries to compete with its customers and fails, then they'll leave, to someone like Google cloud.
  - 013a 10y ago
    It is brilliant. But their track record doesn't seem to be all that great. They add services to Prime like Video and Music, but their competition is still around. No one is leaving Netflix or Spotify. More importantly, the main reason to pay for Prime is shipping. The rest are value-adds that might dissuade someone from unsubscribing, but I just don't think many people think "Wow, I need to pay for Prime Video!" Their SaaS offerings on AWS are the same. Do people get excited about Quicksight, WorkDocs, or WorkMail? Not that I've seen. They have customers. People use them. But compared to their crown jewels; EC2, S3, SQS, Lambda... they're nothing. Amazon will inevitably try to expand upward. But I see it being as successful as Prime Music or Amazon Cloud Drive. Its too much "can we do this" and not enough "should we do this".
user5994461 10y ago
> they are fickle and extremely price sensitive Not at all. Most customers couldn't care less about money. There are numerous people who are price sensitive, the amateurs who are running a test app and complaining that digital ocean is cheaper, then move to the weirdest hoster they could find because that's only $2 a month. These are NOT AWS customers.
- iamacynic 10y ago
  > Not at all. Most customers couldn't care less about money. you're out of your mind. customers at the high end care MORE about money, not less. the company spending $1 million/month on AWS is desperately looking for ways out. DESPERATELY. their entire business is being held hostage by amazon. jeff bezos has them by the balls and is squeezing harder and harder by the day. they have hired consultants to do the analysis, they have hired operations VPs to get them out, but they are failing. they are failing, and shoveling even more money to AWS every week, or their business goes dark. they are doing this because one side of their business (doing stuff) is outpacing their intelligence on the other side (paying for infrastructure to do stuff). this is the genius of amazon. this is why they are successful. amazon can arbitrage this opportunity better than anyone else currently. how do i know? i compete with amazon and talk to customers on a weekly basis. they are desperate. they woke up one day and are are now sending their entire profit margin to jeff bezos. every single CFO is thinking about it. how panicked are they? you could cut their bill in half and they still wouldn't do it. they're scared, like a deer in the headlights. they don't know what to do. what if they make a wrong decision? ohhhhh my goddddddddd but... let's do nothing and keep our jobs. that's the reality. meanwhile, s3 can go down for half a day, and amazon doesn't even really have to acknowledge it. becuase what are the customers going to do? MOVE? LOL! you might as well ask them to build a time machine. that is real. people live in that reality. sometimes against their will. people care about costs, and try hard, and all of those nice things, but they will soon be losers because jeff bezos is just BETTER at business than they are. jeff bezos is literally being paid by the people he is about to put out of business at the application level, and they're happy to pay him to do it. it's amazing. it truly is. here's the problem: more people know how to click a button on console.aws.amazon.com than to migrate and operate an entire site. people simply do not have the skills. they just don't. they don't know how the internet actually works, but they're operating a business on the internet. they're dumb. amazon capitalized on that, good for them. maybe the era where needing to actually knowing how the internet works is over. i don't know.
quanticle 10y ago
>i don't think i agree. i think they're moving up the chain to plug weaknesses in their model. Moving up the chain doesn't plug weaknesses. It dilutes your focus and increases the number of competitors gunning for you. The single worst business decision that Larry Ellison made was to acquire SAP. He looked at SAP's product, building on top of Oracle's databases, and thought, "Hey, that's value I can capture." The effect of that acquisition was to dilute Oracle's focus on its core product, which, in the long run, probably hurt Oracle more than its acquisition of SAP helped.
- sfdghjkl2345678 10y ago
  Oracle never bought SAP. You are WRONG.
- travem 10y ago
  Are you thinking of the acquisition of PeopleSoft by Oracle[1]? SAP are not owned by Oracle. [1] http://www.oracle.com/us/corporate/press/017124_EN http://www.oracle.com/us/corporate/press/017124_EN

nickbauman 10y ago

Google App Engine is a product, not just a collection of APIs or even an application. The closest thing Amazon has to that is Elastic Beanstalk, which resembles Heroku closely.

omgbear 10y ago
It's a pretty shallow clone of even Heroku.
- discodave 10y ago
  And Heroku is a thin layer on AWS. :)
feedjoelpie 10y ago
If Beanstalk could compete with Heroku, no one would use Heroku.

nebabyte 10y ago

Even LEGO sells mass-produced kits. And sure, kids predominantly play with LEGOS by building their own things. But when it comes to toys, LEGO isn't the only thing out there. And which helicopter would you think kids play with - the make-believe one that they have to wave around and pretend flies, or the mass-produced quadcopter that actually flies? Just because Amazon does what it does now well doesn't mean it can't or shouldn't keep expanding. Quite the opposite - if they're able to optimize processes so well at the levels they work at, why not move up to higher levels and continue the growth?

paulddraper 10y ago
The analogy falls apart because Legos blocks are not made of smaller Lego blocks. AWS does put things together. E.g. Autoscaling, RDS, Spot Fleets, OpsWorks Nothing you couldn't do with their more basic pieces. But these are still reusable and composable.
iainmerrick 10y ago
And which helicopter would you think kids play with - the make-believe one that they have to wave around and pretend flies, or the mass-produced quadcopter that actually flies? Mostly the Lego one. :)
- sitharus 10y ago
  The pre-built one only flies. The lego one can be a submarine, turn in to a rocket, shoot lasers, arrack your brother... much more fun! Same is true of AWS, I'm just older.

lstroud 10y ago

Do we not consider the storefront and payment processing offerings business software? What about Aurora, Redshit, and EMR competing directly with Oracle and SQL Server? Or, their replacement of a number of web application servers? Seems like they started to climb that vine a while back.