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Actually lol’d at “unlock more choice,” - if it’s truly a commodity product we’d expect basically zero margin. Clearly Azure, AWS and GCP are not zero margin, w

Actually lol’d at “unlock more choice,” - if it’s truly a commodity product we’d expect basically zero margin. Clearly Azure, AWS and GCP are not zero margin, which implies oligopolistic (does Oracle even count?) price coordination for enterprise cloud. (Edited, forgot Azure)

onlyrealcuzzo 5y ago
MSFT is a much bigger player than Oracle.
- deleted 5y ago
  [deleted]
- sklargh 5y ago
  Oooof big miss. Fixed.
napoleon_thepig 5y ago
While I agree that there's a lot of marketing speak here, I have to note that: 1) You wouldn't expect zero margin, you would expect normal margin, that is, these companies should have around the same margin as the average of the rest of the economy. 2) Commodity markets don't have to be low margin, because a commodity market with high market concentration will be a high margin market.
- lotsofpulp 5y ago
  What does market concentration mean?
  - meragrin_ 5y ago
    I pretty sure it refers to how the market share is spread between the competitors in a market. In a market with low concentration, you have say 20 competitors and no one has more than 10% of the market. When there is high market concentration, 3 of those 20 competitors might have 80% of the market.
dralley 5y ago
>if it’s truly a commodity product Cloud is not a commodity product. Commodities are easily interchangable. For the most part, a banana is a banana, a pound of corn is a pound of corn, a ton of steel is a ton of steel. There can be quality variations of course, but at any given level of quality there are still multiple suppliers, and the costs of switching between them are fairly low. That is not true of the cloud. Every cloud is unique in their own special snowflake ways, the APIs are often fairly different, the switching costs are high and there is a small number of suppliers.
- immibis 5y ago
  They are mostly interchangeable. They all store data; they all run Linux VMs. Switching costs are high though. It's surprising that vendors make their custom cloud features (e.g. SQS) more expensive than running the same thing yourself - because those have the most vendor lock-in.
- rodgerd 5y ago
  Cloud is like changing cars, if changing cars meant that a Toyota had pedals and a steering wheel but a Mercedes had a joystick and a throttle lever.

onlyrealcuzzo 5y ago

MSFT is a much bigger player than Oracle.

deleted 5y ago
[deleted]
sklargh 5y ago
Oooof big miss. Fixed.

napoleon_thepig 5y ago

While I agree that there's a lot of marketing speak here, I have to note that: 1) You wouldn't expect zero margin, you would expect normal margin, that is, these companies should have around the same margin as the average of the rest of the economy. 2) Commodity markets don't have to be low margin, because a commodity market with high market concentration will be a high margin market.

lotsofpulp 5y ago
What does market concentration mean?
- meragrin_ 5y ago
  I pretty sure it refers to how the market share is spread between the competitors in a market. In a market with low concentration, you have say 20 competitors and no one has more than 10% of the market. When there is high market concentration, 3 of those 20 competitors might have 80% of the market.

dralley 5y ago

>if it’s truly a commodity product Cloud is not a commodity product. Commodities are easily interchangable. For the most part, a banana is a banana, a pound of corn is a pound of corn, a ton of steel is a ton of steel. There can be quality variations of course, but at any given level of quality there are still multiple suppliers, and the costs of switching between them are fairly low. That is not true of the cloud. Every cloud is unique in their own special snowflake ways, the APIs are often fairly different, the switching costs are high and there is a small number of suppliers.

immibis 5y ago
They are mostly interchangeable. They all store data; they all run Linux VMs. Switching costs are high though. It's surprising that vendors make their custom cloud features (e.g. SQS) more expensive than running the same thing yourself - because those have the most vendor lock-in.
rodgerd 5y ago
Cloud is like changing cars, if changing cars meant that a Toyota had pedals and a steering wheel but a Mercedes had a joystick and a throttle lever.