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Why do you think they have the margins to afford this?
by fooker 8y ago
Why do you think they have the margins to afford this?
- tw04 8y agoWhat do you mean? Their bandwidth charges currently would be considered egregious for even a medium sized company. Someone the size of Amazon has obviously negotiated far, far lower peering rates than that. The only reason their outbound prices are so high is to keep people from getting out in a cost effective manner. They want to make customers think long and hard before leaving.
- fooker 8y ago> The only reason their outbound prices are so high is to keep people from getting out in a cost effective manner. This doesn't make any sense. Getting out is a one time operation, vs paying a higher recurring fee.
- scrollaway 8y agoGetting out is not necessarily a one-time operation. It can mean switching some services to a competing offer, even just for an evaluation period. So for example, say, you're using a bunch of hosted AWS services and Google's BigQuery.
- jessaustin 8y agoLots of data must be kept for e.g. 7 years yet is never used. Maybe that should never have been in AWS in the first place, but once it's there this is a factor.
- fooker 8y agoAmazon will happily ship you a disk : https://aws.amazon.com/snowball/disk/details/ https://aws.amazon.com/snowball/disk/details/
- jessaustin 8y agoThat's not free either.
- NathanKP 8y agoYou can get an 80 TB Snowball to use for 10 days for $250, and pay a minor shipping charge to get it to and from the AWS datacenter. That's not free but its cheap enough that it should be a tiny decimal point percentage of the value of the 80 TB of business data you can fit on the Snowball. And yes Snowball goes both ways: you can get data into AWS or out of AWS.
- jessaustin 8y agoThanks, that's great info. Hopefully the snowball is considered to be in the same "availability zone"?
- tw04 8y agoAnd how many businesses have 80TB of valuable data that is valuable when it's offline for potentially weeks while it's moved onto the snowball, shipped, taken off of the snowball, and then converted into a usable format onsite? Ignoring the fact you lose all metadata transferring via snowball and any ACLs depending on the type of data and where you pulled it from. You can't pull from anything BUT S3 either. So that database? Sorry, online. The Glacier archive? Going to have to rehydrate it first. The $250 is a rounding error for sure, but not on the cost of the data, on the cost of restoring the data. Even S3 itself you're ignoring the fact that you've got $2,500 in transfer fees alone on that 80TB.
- pmart123 8y agoIn theory, but this would not be true in practice. The cost is meant to make Redshift the default data warehouse versus that “cool new service” over there as an example. Each one of these types of decisions creates more AWS team expertise, and a harder decision to migrate to another service.
- mrep 8y agoTheir gross margin is over 20% according to their public reports and their networking margin is about 90% according to the AWS network engineer I talked to last year so I think they could afford it.
- fooker 8y agoThat doesn't seem high enough to justify halving prices unless it significantly increases revenue, which is pretty unlikely at this point.
- jessaustin 8y agoBut OP's hypothesis is "It will make such a major impact on the internet as a whole that we will see lots of companies grow faster and newer video heavy apps launching." Disagree with that if you like, but if that's true then the revenue will take care of itself.
- CamperBob2 8y agoLosing money on every exabyte and making it up in volume?
- votepaunchy 8y ago90% margins -> cut prices in half -> lose money?!?
- fooker 8y ago20% Doesn't help to just consider network margins.
- jessaustin 8y agoThat's all we're talking about; thread parent said "reduce their public bandwidth cost to half". Obviously, you can argue that this price change idea is not strategically in AWS interest (AWS management agrees right now), but the trivial nitpicking ITT is misguided.