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>But it's insane that running a for-higher[sic] data center is considered a high-margin business. (And testament that the customers are VC-gorged price-unconcio

by jasode 6y ago

>But it's insane that running a for-higher[sic] data center is considered a high-margin business. (And testament that the customers are VC-gorged price-unconcious baby gremlims.) Your analysis is incomplete which is why it looks like insane high-profit margins. Amazon AWS (and MS Azure, Google Cloud) also sell high-value services on top of raw datacenters. It's not just commodity rack servers. Amazon keeps iterating on new value-added services (e.g. see new announcements at annual AWS re:invent conference[1]). E.g. AWS DynamoDB service was announced in 2012 and Netflix is one of the customers that use it. In contrast, other datacenter companies that don't have the same higher value-added portfolio like Rackspace and DigitalOcean are losing money[2] or not even profitable yet[3]. Yes, the lower-tier datacenters are also adding value-added services but the breadth of their product portfolio is not in the same league as AWS/Azure/GCP. Rackspace was losing so much business to AWS that they're trying to sell the idea of customers paying their RS employees to manage AWS.[4] >(And testament that the customers are VC-gorged price-unconcious baby gremlims.) Most of the revenue comes from non-VC businesses. A lot of old Fortune 1000 companies where IT is a cost center shrank their self-run datacenters and moved the workload to the cloud vendors. Another example is AWS winning the big $600 million contract from the CIA. [1] https://www.youtube.com/results?search_query=amazon+re%3Ainvent+2012+2013+2014+2015+2016+2017+2018+2019+keynote https://www.youtube.com/results?search_query=amazon+re%3Ainv... [2] https://www.google.com/search?q=rackspace+%22net+loss%22 https://www.google.com/search?q=rackspace+%22net+loss%22 [3] https://www.sdxcentral.com/articles/news/digitalocean-inhales-another-50m-toward-profit-quest/2020/05/ https://www.sdxcentral.com/articles/news/digitalocean-inhale... [4] https://www.rackspace.com/managed-aws https://www.rackspace.com/managed-aws

fakedang 6y ago
Recently I just began using cloud services. I started with Firebase, thought it was super cool, then moved to GCP, which was super inflexible (and super shit support). So I decided to try Azure, since we used that at a previous startup, but it was too complicated to even get started. So I decided to give Jeff my money (or rather avail of his free tier), and started using AWS. While it's super complicated to use compared to Firebase, it was relatively easy to learn from scratch due to huge amount of support online and what they have on offer. But what honestly stumped me was the HUUUUUUUGE amount of services they have, and the pricing on that. DynamoDB was half the price of Cloud Firestore, the free tier on most services was half that of GCP, and the offerings were insane. Need to host a website? Cloud Front. Launch an app? Lightsail. Satellite connection? Covered. Streaming Data? Kinesis. Queried Database? Elasticsearch. And that's just scratching the surface, I know. Honestly, in a few years, I think we'll see Google forced to exit this space, Azure and AWS competing on price for big name corporate contracts, while others such as Digital Ocean being crumpled, simply because the AWS offering is so vast and widely supported online. And AWS' lock-in is pretty damn good. The only solution to break out of such a duopoly would be for tech oriented companies to stop being lazy and start building out their own cloud infra.
- Daishiman 6y ago
  > The only solution to break out of such a duopoly would be for tech oriented companies to stop being lazy and start building out their own cloud infra. What competitive advantage do you get by making your own in-house, inferior version of an infrastructure service that won't benefit from AWSs economies of scale?
  - fakedang 6y ago
    Not being overly dependent on an outside provider? AFAIK, most traditional corporates using clouds often use multiple cloud services of the same type from different providers.
  - Ericson2314 6y ago
    Not getting bled dry by Jeff?
Ericson2314 6y ago
I'm pretty sure the main "value" those services "add" is resume padding.... :/

by jasode 6y ago

fakedang 6y ago

Recently I just began using cloud services. I started with Firebase, thought it was super cool, then moved to GCP, which was super inflexible (and super shit support). So I decided to try Azure, since we used that at a previous startup, but it was too complicated to even get started. So I decided to give Jeff my money (or rather avail of his free tier), and started using AWS. While it's super complicated to use compared to Firebase, it was relatively easy to learn from scratch due to huge amount of support online and what they have on offer. But what honestly stumped me was the HUUUUUUUGE amount of services they have, and the pricing on that. DynamoDB was half the price of Cloud Firestore, the free tier on most services was half that of GCP, and the offerings were insane. Need to host a website? Cloud Front. Launch an app? Lightsail. Satellite connection? Covered. Streaming Data? Kinesis. Queried Database? Elasticsearch. And that's just scratching the surface, I know. Honestly, in a few years, I think we'll see Google forced to exit this space, Azure and AWS competing on price for big name corporate contracts, while others such as Digital Ocean being crumpled, simply because the AWS offering is so vast and widely supported online. And AWS' lock-in is pretty damn good. The only solution to break out of such a duopoly would be for tech oriented companies to stop being lazy and start building out their own cloud infra.

Daishiman 6y ago
> The only solution to break out of such a duopoly would be for tech oriented companies to stop being lazy and start building out their own cloud infra. What competitive advantage do you get by making your own in-house, inferior version of an infrastructure service that won't benefit from AWSs economies of scale?
- fakedang 6y ago
  Not being overly dependent on an outside provider? AFAIK, most traditional corporates using clouds often use multiple cloud services of the same type from different providers.
- Ericson2314 6y ago
  Not getting bled dry by Jeff?

Ericson2314 6y ago

I'm pretty sure the main "value" those services "add" is resume padding.... :/