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I really like this observation as well, especially the "cost to first kCs" which, for me, is the one differentiator. One of the things that amazed people was t

I really like this observation as well, especially the "cost to first kCs" which, for me, is the one differentiator. One of the things that amazed people was the Blekko, the search engine company, operated its own clusters in a data center rather than using AWS. We got a lot of side-eye for that but the numbers were pretty stunning. For our app, the cost of running that data center was about $120K/month, on Amazon (or IBM's cloud) that cost was at least $1.2M/month so 10x higher. What was even more of a pain that getting all the machines in the same racks so that they didn't share "east west" bandwidth with other racks in the data center was a huge ask for these folks, the proposed solution of over provisioning, made it just that much more expensive.

jacques_chester 6y ago
From an outside view it seems like AWS has definitely arbitraged costs over time to collect a lot of money. Raw capacity that costs them $1 today costs them $0.80 next year, but they still sell it at the price they chose to cover the $1. Having said that, there will be someone sprinting breathlessly into the thread to tell me that AWS has lowered prices on X a dozen times and on Y fourteen times and so on. But these decisions are made intermittently, by humans with bonus schemes, and AWS is harvesting the surplus in the meantime. It feels from the outside as if retail Amazon pays serious, ongoing attention to selling at the minimum possible price, but AWS just doesn't feel the same pressure to do so.