3 ms·
My suspicion is that Google's unit economics for compute and network are better than Amazon's, because they've never historically had the ability to push costs
by jacques_chester 10y ago
My suspicion is that Google's unit economics for compute and network are better than Amazon's, because they've never historically had the ability to push costs onto a customer. It all fell to their own bottom line.
If they can sustain a lower price, picking a fixed discount gives them a marketing edge, even if AWS would come out lower overall. Most humans will pay a premium for certainty -- the certainty effect or "taxicab effect".
- boulos 10y agoThere are certainly particular instances in particular regions or zones that are cheaper than the preemptible price we've set. If you look at larger instances, we often are drastically cheaper. Add in the per-minute versus per-hour pricing, and some customers have seen massive wins (I recall one at nearly 10x less). The distinction, as you've surmised, is that predictability is awfully useful. This 220k run (and Drew's quick 400k run last Sunday) had a predictable price. I doubt that such a run on Spot would have left the market price untouched ;). That said, we absolutely have excess capacity that maybe having an auction clearing mechanism would fill. But I don't think it's worth the customer pain. Moreover, even Drew has come to us from Spot, suggesting that simplicity at a usually-fair/good price can take market share away (and reminder this is a fast growing market!).
- jacques_chester 10y agoRight. The basis of budgeting and capacity planning is that everybody who participates in a free market secretly wishes they didn't have to.