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AWS was similar for years. Huge losses, now they are profitable. The big difference with Google Cloud is that they have a long history of jacking up pricing a

by hg35h4 6y ago

AWS was similar for years. Huge losses, now they are profitable. The big difference with Google Cloud is that they have a long history of jacking up pricing at random. Wake up one morning and find that the solution you just spent months building will bankrupt your business under the new pricing regime.

desiarnezjr 6y ago
Not only that, but Amazon has the discipline for a very long-term execution. To this day, many of the vertical categories on Amazon are very low margin or make little fiscal sense. But long-term they will probably win or make a big dent in those niches.
ec109685 6y ago
AWS didn’t suffer huge losses for years. In fact it was “hugely profitable”: https://www.ben-evans.com/benedictevans/2020/9/6/amazons-profits https://www.ben-evans.com/benedictevans/2020/9/6/amazons-pro...
- hn_throwaway_99 6y ago
  Your linked article doesn't show that, at all. AWS as we know it today essentially had its first public release in 2006 with EC2 and S3, which means it existed for 7 years before your article even breaks out profit for AWS in 2013.
  - ec109685 6y ago
    But is there anything to support the huge losses angle?
- psds2 6y ago
  It's hard to compare apples to apples here because AWS leverages infrastructure Amazon already had to keep around for seasonal surges to its core business. I do not believe that Google has excess capacity for seasonal demand.
  - jakupovic 6y ago
    This was the story given to public. The reality was that all of the infrastructure for AWS was brand new purpose built for AWS. There was no sharing between the stacks. Source worked there in the early days. The story sold was that Amazon was utilizing spare capacity from retail side, completely wrong.
    - acct776 6y ago
      The hardware was? Or the software? Both? From their historical prices, I find it difficult to believe they're not dogfooding.
      - jakupovic 6y ago
        Everything was purpose built for AWS. Retail was just coming onto AWS side around 2011/2.
    - hn_throwaway_99 6y ago
      Thanks for your post. That origin myth never made sense to me in the first place: "OK, so during the holidays when retail needs that spike in capacity again, where do the AWS customers go? Oh yeah, and a lot of those customers also have the same seasonality patterns as Amazon retail."
woofie11 6y ago
The big difference was that AWS left behind a trail of vocal, satisfied customers. Google has left behind a trail of de-platformed, de-monetized, (as you pointed out) re-priced, discontinued, API-changed, and otherwise angry customers. Genuine brand value -- having customers trust you -- counts for a lot. AWS started in the red and quickly moved into the black. I was very skeptical the first time I used AWS, since the whole concept was new. I was converted after a few weeks of it working really well. I stayed converted with now a decade of it still working really well, of having good customer service, and of having 99.[many nines] uptime. Google Cloud went the opposite way. Google started with all the developer good-will in the world, and I really wanted it to succeed. After a half-dozen serious failures, I won't touch it. I know dozens of developers who will never use Google Cloud again. I'm not sure how Google will dig itself out of that one. At this point, it feels like it's throwing bad money after good.
- gryz 6y ago
  Is there a list of examples of what they did? Or something alike to learn more about this.
- thomascgalvin 6y ago
  Google has a terrible reputation for everything aside from search and email. People now expect them to cancel, abandone, or otherwise fuck up any product they announce. The news about their Stadia team being disbanded wasn't even a surprise; it felt like an inevitability. Even from a simple CYA perspective, I could never recommend my customers build their product on top of a Google platform.
  - petercooper 6y ago
    People now expect them to cancel, abandone, or otherwise fuck up any product they announce. Certainly true for me. They could release the most amazing new thing tomorrow and I'd wait 6 months to see if it's actually going to go anywhere. That's branding and their brand, while not bad, is certainly not "dependable."
  - ac29 6y ago

by hg35h4 6y ago

desiarnezjr 6y ago

Not only that, but Amazon has the discipline for a very long-term execution. To this day, many of the vertical categories on Amazon are very low margin or make little fiscal sense. But long-term they will probably win or make a big dent in those niches.

ec109685 6y ago

AWS didn’t suffer huge losses for years. In fact it was “hugely profitable”: https://www.ben-evans.com/benedictevans/2020/9/6/amazons-profits https://www.ben-evans.com/benedictevans/2020/9/6/amazons-pro...

hn_throwaway_99 6y ago
Your linked article doesn't show that, at all. AWS as we know it today essentially had its first public release in 2006 with EC2 and S3, which means it existed for 7 years before your article even breaks out profit for AWS in 2013.
- ec109685 6y ago
  But is there anything to support the huge losses angle?
psds2 6y ago
It's hard to compare apples to apples here because AWS leverages infrastructure Amazon already had to keep around for seasonal surges to its core business. I do not believe that Google has excess capacity for seasonal demand.
- jakupovic 6y ago
  This was the story given to public. The reality was that all of the infrastructure for AWS was brand new purpose built for AWS. There was no sharing between the stacks. Source worked there in the early days. The story sold was that Amazon was utilizing spare capacity from retail side, completely wrong.
  - acct776 6y ago
    The hardware was? Or the software? Both? From their historical prices, I find it difficult to believe they're not dogfooding.
    - jakupovic 6y ago
      Everything was purpose built for AWS. Retail was just coming onto AWS side around 2011/2.
  - hn_throwaway_99 6y ago
    Thanks for your post. That origin myth never made sense to me in the first place: "OK, so during the holidays when retail needs that spike in capacity again, where do the AWS customers go? Oh yeah, and a lot of those customers also have the same seasonality patterns as Amazon retail."

woofie11 6y ago

The big difference was that AWS left behind a trail of vocal, satisfied customers. Google has left behind a trail of de-platformed, de-monetized, (as you pointed out) re-priced, discontinued, API-changed, and otherwise angry customers. Genuine brand value -- having customers trust you -- counts for a lot. AWS started in the red and quickly moved into the black. I was very skeptical the first time I used AWS, since the whole concept was new. I was converted after a few weeks of it working really well. I stayed converted with now a decade of it still working really well, of having good customer service, and of having 99.[many nines] uptime. Google Cloud went the opposite way. Google started with all the developer good-will in the world, and I really wanted it to succeed. After a half-dozen serious failures, I won't touch it. I know dozens of developers who will never use Google Cloud again. I'm not sure how Google will dig itself out of that one. At this point, it feels like it's throwing bad money after good.

gryz 6y ago
Is there a list of examples of what they did? Or something alike to learn more about this.
thomascgalvin 6y ago
Google has a terrible reputation for everything aside from search and email. People now expect them to cancel, abandone, or otherwise fuck up any product they announce. The news about their Stadia team being disbanded wasn't even a surprise; it felt like an inevitability. Even from a simple CYA perspective, I could never recommend my customers build their product on top of a Google platform.
- petercooper 6y ago
  People now expect them to cancel, abandone, or otherwise fuck up any product they announce. Certainly true for me. They could release the most amazing new thing tomorrow and I'd wait 6 months to see if it's actually going to go anywhere. That's branding and their brand, while not bad, is certainly not "dependable."
- ac29 6y ago