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> Heroku runs on AWS already, they're earning cost + markup as it is. If they purchased Heroku and did this, they'd be out several billion dollars plus lose the
by darkwater 6y ago
> Heroku runs on AWS already, they're earning cost + markup as it is. If they purchased Heroku and did this, they'd be out several billion dollars plus lose their markup.
I fail to understand this. If Heroku is on AWS, Heroku is selling its services at price X. AWS is getting from Heroku Y money, where X > Y (or it should at least, if Heroku is not operating at loss). If Amazon owns Heroku it could sell its services still for X, eating Heroku's margin plus the margin it already had on the AWS offering.
- darkr 6y ago> I fail to understand this Parent was proposing that AWS sell Heroku services at cost. As you say, my point was it doesn’t make sense
- ksec 6y agoHeroku Buy AWS services at standard AWS Price (X) * (Substantial) Discount. HeroKu Sell their services at (Y) where currently Y is >(X). If they had acquired Heroku by Selling it at AWS Price (X), Amazon is still earning where they previously were not earning from those heavy Discount. At the expense of the Operational Cost of Heroku Team. And the benefits of further lock in and additional market segment which is currently not very well served by AWS.