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These are list prices, and absolutely nowhere near the price large consumers pay. If you commit to a certain bandwidth per month for an extended period of time,

These are list prices, and absolutely nowhere near the price large consumers pay. If you commit to a certain bandwidth per month for an extended period of time, it’s not difficult to get 80%-90% discount. (I worked at a video delivery startup a few years back and these were exactly the type of discounts we would get)

edmundsauto 7y ago
I think the point of bringing this up is the price ratio between the services. If you get 80-90% off both, Oracle is still ahead.
- hinkley 7y ago
  AWS would have to offer an 83% discount just to match Oracle's list price. At an 80% discount Oracle doesn't even have to lift a finger.
  - edmundsauto 7y ago
    OTOH, the absolute numbers matter. If it's $1,000K/yr for AWS, that's $100K/yr for Oracle. That could be a deciding factor - $900M difference OTOH, if you are getting 90% off the list on both, you're talking $100M vs $10M. That's enough where features, SLA, QoS, matters more ($90M).
    - hinkley 7y ago
      Not sure I agree with your examples but I think I get your gist. Saving a little might not be worth the labor costs and risk differences between two solutions. Paying a bit more to contract out a class of problem could be the thing to do. Though probably not in Zoom's particular case. If this were Patagonia, or Home Depot, sure. Pay someone else's IT nerds to deal with the problem. But Zoom is IT through and through. They better understand the low level details of how their stuff works, or when they get into trouble they won't even see it coming, and we will wonder very loudly why not.
ISL 7y ago
Sounds like Amazon's margin is someone's opportunity.
- rstupek 7y ago
  Oracle's opportunity apparently!
  - ISL 7y ago
    Or anyone who can advertise lower outbound data costs.
    - kl4m 7y ago
      Which is pretty much everyone else except GCP.
      - haneefmubarak 7y ago
        Why can't GCP advertise/provide lower outbound costs? Do they do something special with their networking that makes it substantially more expensive?
        kl4m 7y ago
        Beats me. They offer "Premium" (~0.12$/GB) and lately "Regular" (~0.8/GB) network tiers, and their interconnect service. I guess high cost of outbound networking helps locking in customers as well.
graton 7y ago
I can't help but think "so what" if they are list prices. That is how we should compare them is by list prices. If AWS, GCP, and others don't want to have their pricing appear to be exorbitant then they should adjust their list prices. Also what percentage of their total customers are not paying list price? Is it more than 10%, 20%, 30%? I know that me as an individual I will be paying list prices. And the problem with not comparing list prices is that of course you can have two or more companies getting discounts with the exact same bandwidth who will be paying vastly different rates.
- user5994461 7y ago
  Do not compare on list prices for large companies like that. Comparing on list prices is a huge mistake from developers (and young folks new to running a company), because developers hate sales and negotiating and talking to people. Everything above some volume has to be negotiated with suppliers. In a video company doing 1 000 000 TB of transfer per month, you gotta negotiate with every provider for bandwidth, that's just the way it is. Just like if you were working for a plane company, you wouldn't be buying fuel from the station down the street.
notyourday 7y ago
I have been purview to negotiations of very large deals with both GCP and AWS. Both would heavily discount compute ( to the tune of 75% ) but barely discount transfer. Since transfer grows directly with popularity and can rarely be optimized apart from moving it away from GCP and AWS and compute does not, the compute discounts on a large scale are trivial compared to getting taking to the cleaners on transfer.
vasco 7y ago
At AWS you got an 80% discount on transfer? My eyebrows rose to the roof, I'm not convinced this is true. Which specific cloud provider were you dealing with? Without going into more details due to NDAs, the few things I've looked at were nowhere near that, specially for transfer.

edmundsauto 7y ago

I think the point of bringing this up is the price ratio between the services. If you get 80-90% off both, Oracle is still ahead.

hinkley 7y ago
AWS would have to offer an 83% discount just to match Oracle's list price. At an 80% discount Oracle doesn't even have to lift a finger.
- edmundsauto 7y ago
  OTOH, the absolute numbers matter. If it's $1,000K/yr for AWS, that's $100K/yr for Oracle. That could be a deciding factor - $900M difference OTOH, if you are getting 90% off the list on both, you're talking $100M vs $10M. That's enough where features, SLA, QoS, matters more ($90M).
  - hinkley 7y ago
    Not sure I agree with your examples but I think I get your gist. Saving a little might not be worth the labor costs and risk differences between two solutions. Paying a bit more to contract out a class of problem could be the thing to do. Though probably not in Zoom's particular case. If this were Patagonia, or Home Depot, sure. Pay someone else's IT nerds to deal with the problem. But Zoom is IT through and through. They better understand the low level details of how their stuff works, or when they get into trouble they won't even see it coming, and we will wonder very loudly why not.

ISL 7y ago

Sounds like Amazon's margin is someone's opportunity.

rstupek 7y ago
Oracle's opportunity apparently!
- ISL 7y ago
  Or anyone who can advertise lower outbound data costs.
  - kl4m 7y ago
    Which is pretty much everyone else except GCP.
    - haneefmubarak 7y ago
      Why can't GCP advertise/provide lower outbound costs? Do they do something special with their networking that makes it substantially more expensive?
      - kl4m 7y ago
        Beats me. They offer "Premium" (~0.12$/GB) and lately "Regular" (~0.8/GB) network tiers, and their interconnect service. I guess high cost of outbound networking helps locking in customers as well.

graton 7y ago

I can't help but think "so what" if they are list prices. That is how we should compare them is by list prices. If AWS, GCP, and others don't want to have their pricing appear to be exorbitant then they should adjust their list prices. Also what percentage of their total customers are not paying list price? Is it more than 10%, 20%, 30%? I know that me as an individual I will be paying list prices. And the problem with not comparing list prices is that of course you can have two or more companies getting discounts with the exact same bandwidth who will be paying vastly different rates.

user5994461 7y ago
Do not compare on list prices for large companies like that. Comparing on list prices is a huge mistake from developers (and young folks new to running a company), because developers hate sales and negotiating and talking to people. Everything above some volume has to be negotiated with suppliers. In a video company doing 1 000 000 TB of transfer per month, you gotta negotiate with every provider for bandwidth, that's just the way it is. Just like if you were working for a plane company, you wouldn't be buying fuel from the station down the street.

notyourday 7y ago

I have been purview to negotiations of very large deals with both GCP and AWS. Both would heavily discount compute ( to the tune of 75% ) but barely discount transfer. Since transfer grows directly with popularity and can rarely be optimized apart from moving it away from GCP and AWS and compute does not, the compute discounts on a large scale are trivial compared to getting taking to the cleaners on transfer.

vasco 7y ago

At AWS you got an 80% discount on transfer? My eyebrows rose to the roof, I'm not convinced this is true. Which specific cloud provider were you dealing with? Without going into more details due to NDAs, the few things I've looked at were nowhere near that, specially for transfer.