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That could also mean that AWS bakes in incredible margin, so they can absorb underlying component price increases without going upside down on margin.

SahAssar 5y ago
Agreed, but in that case every AWS offering should always be more expensive, right? Is that the case?
- joebob42 5y ago
  Probably not literally, but in my experience the answer is more or less just "yes, aws is more expensive than competitors"
  - tedivm 5y ago
    This is the opposite of my experience, although it does depend on workload.
    - joebob42 5y ago
      Thinking more, I guess I'm comparing to more creative / niche competitors or different approaches, rather than just doing the same thing on azure / gcp.
LoveGracePeace 5y ago
This is not my experience with AWS, not at all. AWS deserves huge praise for this.
jeffparsons 5y ago
That's fine, because as a business I can decide whether or not that price is acceptable to me. On the other hand, if they are known to occasionally significantly increase the price of their offering, then I have to factor that risk into my budget (let's face it: most businesses are locked in to their current cloud provider to a significant extent) so the price on the label is misleading. I much prefer to pay a bit more up front than to have to constantly guesstimate how much financial risk is introduced by my cloud provider's erratic business decisions.
fnordpiglet 5y ago
As an ex aws senior leader many products in aws operate at a loss when the underlying infrastructure becomes more expensive for some reason. Glacier is a great example of this, they ran at a steep loss as they mis-bet that hard drive prices would drop faster than tape storage and had to retire their original architecture and redevelop a tape infrastructure. It would have been totally reasonable to increase prices then decrease them once the new platform was available, but they chose instead to operate at a loss and not adjust prices. I believe they actually decreased prices once the tape infra was up. That said margin is why they could do this. Aws as an overall portfolio of services is profitable enough that they can loss lead on many products that operate at a loss for many reasons. Finally pricing is done with margins enough to later lower prices, mostly done to ensure they don’t end up in a permanent loss leader situation by misjudging margin or some other aspect prior to launch. But at least when Andy Jassy was in charge there never would have been a price increase - ever. We all knew down was the only thing he would consider, and lowing prices was a good way to get promoted.

SahAssar 5y ago

Agreed, but in that case every AWS offering should always be more expensive, right? Is that the case?

joebob42 5y ago
Probably not literally, but in my experience the answer is more or less just "yes, aws is more expensive than competitors"
- tedivm 5y ago
  This is the opposite of my experience, although it does depend on workload.
  - joebob42 5y ago
    Thinking more, I guess I'm comparing to more creative / niche competitors or different approaches, rather than just doing the same thing on azure / gcp.

LoveGracePeace 5y ago

This is not my experience with AWS, not at all. AWS deserves huge praise for this.

jeffparsons 5y ago

That's fine, because as a business I can decide whether or not that price is acceptable to me. On the other hand, if they are known to occasionally significantly increase the price of their offering, then I have to factor that risk into my budget (let's face it: most businesses are locked in to their current cloud provider to a significant extent) so the price on the label is misleading. I much prefer to pay a bit more up front than to have to constantly guesstimate how much financial risk is introduced by my cloud provider's erratic business decisions.

fnordpiglet 5y ago

As an ex aws senior leader many products in aws operate at a loss when the underlying infrastructure becomes more expensive for some reason. Glacier is a great example of this, they ran at a steep loss as they mis-bet that hard drive prices would drop faster than tape storage and had to retire their original architecture and redevelop a tape infrastructure. It would have been totally reasonable to increase prices then decrease them once the new platform was available, but they chose instead to operate at a loss and not adjust prices. I believe they actually decreased prices once the tape infra was up. That said margin is why they could do this. Aws as an overall portfolio of services is profitable enough that they can loss lead on many products that operate at a loss for many reasons. Finally pricing is done with margins enough to later lower prices, mostly done to ensure they don’t end up in a permanent loss leader situation by misjudging margin or some other aspect prior to launch. But at least when Andy Jassy was in charge there never would have been a price increase - ever. We all knew down was the only thing he would consider, and lowing prices was a good way to get promoted.