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This is good advice -- but now that AWS has so many services, it's an extremely complex question. There are path dependencies: adopting an AWS service today may
by gfodor 9y ago
This is good advice -- but now that AWS has so many services, it's an extremely complex question. There are path dependencies: adopting an AWS service today may accelerate your product sufficiently to get it to the point of traction and sustainability, where it would have failed otherwise.
I think it's important to have a good framework for making these decisions. As you mentioned, EC2 and S3 are on one end of the spectrum: low switching costs and coupling, but also low in terms of differentiation at this point. Whereas other AWS services that are more bleeding edge could actually be the foundation of a temporary competitive advantage for your product, but today would introduce deep coupling of your service with AWS.
The trick is basically landing somewhere where you've made good bets: the ideal scenario is that you have a good chance of having an escape plan if/when the situation warrants it, while not missing out on the opportunity to take advantage of the services that your competitors (like, for example, those who are on the "EC2/S3 only" methodology you mention) may be forced to build themselves out of fear.
Unfortunately the best way to do this is to be able to predict the future: which services on AWS have high value and high longevity, and will have similar, cheap offerings on their competitors and/or via OSS in the coming years? S3 is an example of a good bet: if you adopted S3 when it first arrived, it may have felt like unnecessary couping with AWS, but it was a huge accelerant if your business relied upon large, reliable file storage. (In fact many startups likely today exist because they were able to bootstrap off of S3.) S3 was a good, long term bet -- now, you can drop in an OSS replacement that is API-compatible in a worst-case scenario. Other services on AWS have come-and-gone through their hayday without going through that transition, because they were either (in retrospect) transitional technology or basically "the wrong thing." So, it comes down to predicting :)
A couple of things that increase probability an AWS service is more destined for long term success + commoditzation (in my view):
- Built on open protocols/standards
- Simplicity in APIs and feature set
- Versatility of use-cases
- Deeper in the stack, vs user-facing
- No existing open source alternative with traction
- Backchannel confirmation that Amazon itself is using it :)
For example, DynamoDB when it first came out was a huge "no" for me personally -- it was a very quirky design, with complex, bespoke concepts around indexing, with lots of good open source projects offering alternatives, and I heard Amazon didn't trust it internally :) Whereas other services like Redshift ticked all the right boxes out of the gate. So there's some hope of making good bets here, but sometimes you do need to throw caution to the wind if something extremely compelling comes along that feels like it could be a shot-in-the-arm to your product despite not having most of these attributes.
Also, FWIW since I like calling my shots: I think the current iteration of AWS server-less tech (while a necessary first step towards understanding the design space, and a technical marvel imho) is probably not a good long term bet as a foundational technology for a product you would like to de-risk in this aspect, but we'll see :)
- hodgesrm 9y agoThe long-term issue with adopting Amazon is pricing power--once you are committed AWS has it and you don't. Take your Redshift example. It's an outstanding service but once you build apps around it and load a bunch of data the switching costs become very high. AWS can raise the price quite a bit before it makes economic sense for working apps to move off it. Consequently a key question to ask is when do my favorite AWS services become cash cows? At that point your economics will change substantially. You may be living day-to-day in your business but the stock market thinks Amazon will extract large profits out of AWS in spite of growing competition. Food for thought...
- gfodor 9y agoAWS is a growth business, in a competitive space, so (particularly given their overall history) it seems unlikely they will increase margins if it could risk adoption. Of course, in the "long term" (whatever that means), the market and shareholders expect to reap vast profits, and price that, along with the company's free cash flows, into the stock. However, my personal thesis is that Amazon specifically is a bit of an anomaly in this regard: it seems unlikely to me that we will see any strategic shift in pricing from basically any Amazon-owned entity in our lifetimes -- the culture is too ingrained towards a strategy of complete and utter dominance over all markets, margin reduction being a key tool in the toolbox. So if I were to bet I would say pricing power is pretty low on the list of concerns of AWS lock in -- more concerning are things like unexpected conflicts of interest as Amazon eats the world (see also: Netflix), operational dependency (ultimately, you rely upon AWS ops' competency for your uptime, security, etc), end-of-lifing of services you depend on, opportunity cost vs other vendors who may offer better services, and other unknown unknowns.
- hodgesrm 9y agoCertainly there are other concerns--no argument there. That said, Amazon Prime prices just went up 20%, so Amazon will clearly raise prices if they think the market will bear it. Moreover, "complete and utter dominance" sounds like a monopoly. It's difficult to think of a monopoly that didn't raise prices and/or decrease service once they were established. I would not start a business on Amazon without assessing the risk of tying my fate to a single large vendor, for cost as well as other reasons you cited like Amazon deciding to compete with you.