5 ms·

Just another example that a free market does not always ensure healthy competition and some times intervention is needed to level the playing field.

qeternity 3y ago
I say this as someone who only uses AWS for DR backups: hosting infra is one of the most competitive industries out there. Major cloud costs are exorbitant but that should be interpreted as proof of a great product. I shudder at paying 9c/gb egress but apparently many others do not.
- vidarh 3y ago
  Same. I use Hetzner and DigitalOcean for my own stuff, and shudder at AWS costs. At the same time both my current and previous employers use AWS and it's fine for their user because revenue is (very) high relative to the cloud resource usage, and that is a situation where cloud usage is fine. But so many - B2C in particular - businesses who uses cloud have tight enough margins that they're just setting themselves up for being disrupted by a competitor with tighter cost control.
- cntainer 3y ago
  The magic of cloud is how quickly you can scale things up. If you're a new fast growing business it will give you a competitive edge. If you drank to cloud kool-aid from the beginning you kind of get used to huge costs for simple services so it's easier for your brain to justify paying 10k a month for a simple web app deployed in kubernetes, using cosmos db and any other number of services. I've seen many companies that started on the cloud and their core architecture is so interleaved with the cloud that it would a huge investment to reduce that dependency and switch.
  - oarsinsync 3y ago
    > The magic of cloud is how quickly you can scale things up I see this spouted a lot, but my recent (last 6 months?) experience with AWS is that unless I pay up front to reserve a tonne of high end instances that I don’t necessarily need today, but might need tomorrow, I’m regularly running into capacity issues where I cannot spin up new instances of the metal that I want, and AWS support confirms they just don’t have the capacity unless we pay to reserve it up front. At that point, it’s no different to running my own DC, where I already have 3 months of runway on my server pipeline anyway.
    - dageshi 3y ago
      I wonder what the cause of that is? I think I've heard this sentiment elsewhere recently but I don't recall it in the past. So what's caused the capacity constraint?
      - oarsinsync 3y ago
        The risk to Amazon of enabling you to scale up low end instances on demand is relatively low. The risk of doing the same with high end instances is a different story. Low risk & high margin products make for a highly profitable business. High risk and lower margin products less so. Their target audience is people that can be equally well served by digital ocean and their ilk, but are happy to pay the Amazon premium. It’s a good business model for Amazon, and a terrible value proposition for the customer who may not know better, and thinks they’re paying to de-risk their potential future growth requirements. The cost of migrating out then becomes prohibitive (both in technical hours and egress fees), so you like it or lump it, but either way, you likely just wait and/or pay Amazon more. Until you can’t.
  - re-thc 3y ago
    > The magic of cloud is how quickly you can scale things up. If you're a new fast growing business it will give you a competitive edge. The magic if there is 1 is not the scale but the free credits. Startups can go years without paying and then it's all too late. Scale is meaningless when it costs 10x more. Just have spare capacity and lots of it.
- ClumsyPilot 3y ago
  > hosting infra is one of the most competitive industries out there. Here is an experiment - tell your employer you will be hosting on (insert no-name provider here), to same a literal million dollars, and see if you can get security team to sign off on it. Here is another experiment - reach out to he security team, and tell them AWS costs are too high, ask them which providers they will be ready and willing to sign off. My guess is it will not be a big list beyond AWS/Azure/GCP. So the market is not competitive at all, most of us cannot switch providers even if the alternative would be 100x better. PS: I am not saying security team are assholes, I am pointing out a major barrier to competition.
  - hkt 3y ago
    I remember the sad case of DataCentred: https://www.datacenterdynamics.com/en/news/datacentred-is-shutting-down-after-losing-hmrc-as-a-customer/ https://www.datacenterdynamics.com/en/news/datacentred-is-sh... tl;dr even after getting a big public sector contract, a UK based cloud provider was killed off after scaling to meet demand which was then withdrawn. Attaining - and keeping - scale is extremely difficult. And that was just IaaS provision.
    - nly 3y ago
      If you're scaling your whole business for one customer based on one contract then you better be sure you can either scale down again, or the contract has safeguards in it to stop a rugpull.
      - hkt 3y ago
        You're not wrong, but the public sector should probably not be pulling the rug out from underneath anyone.
  - midasuni 3y ago
    No one ever got fired for buying AWS
    - 3y ago
- hkt 3y ago
  The summary of findings confirms that IaaS is competitive, PaaS less so, SaaS even less than that.
- Jochim 3y ago
  Major cloud costs are also proof that finance departments hate additional vendors.
madaxe_again 3y ago
A free market always results in monopoly - it is the nature of capital to accrue and concentrate. This is the old unpopular Hayek/Friedman “classic liberal” position, that markets and industry should be heavily regulated and taxed.
cbeach 3y ago
At least free markets -allow- competition. In socialism/communism all sectors become state monopolies, with no market incentive to provide a decent service, nor to compensate workers fairly.
- becquerel 3y ago
  There is no state in communism.
  - cnity 3y ago
    This is a very weird claim: https://en.wikipedia.org/wiki/Communist_state https://en.wikipedia.org/wiki/Communist_state. Unless you are talking about the theoretical "pure communism" which is fiction/fancy and we may as well be talking about utopia.
- happymellon 3y ago
  You don't appear to understand what Socialism is. It makes sense with this being an American site, and most Americans think that Socialism is essentially the same thing as Communism (but then why define them as separate things?). Community, Cooperative, Employee owned are all forms of socialism. None of them prevent competition. > no market incentive to provide a decent service, nor to compensate workers fairly. If you owned part of the company you worked for, you would be more likely to provide good service as that would then have repeat business and would directly financially impact you. The performance of the business is the only way you would get paid and as there are no shareholders the company would compensate rather than dividend. Your comment makes absolutely no sense, socialism doesn't prevent free markets.
  - cbeach 3y ago
    Socialism is state ownership of the means of production. "Community, Cooperative, Employee owned" are all concepts that can (and do) exist under a capitalist regime. Socialism is very different, and it does prevent free markets.
globular-toast 3y ago
Do people even understand what "free market" means? A free market is one with low or no barriers to entry for suppliers and perfect information available to consumers such that they can always make the optimal choice. How can anyone, especially on this site, think the cloud market is anywhere close to being free? I think people are confused thinking free market means no regulation. No regulation leads to monopoly which is the furthest from a free market you can possibly get. People who seriously advocate for such things are ignorant fools. There are countless examples of how markets fail and that's why every major economy in the world has a government.
stuaxo 3y ago
Indeed, does a free market ensure a monopoly in the end ?
- rguillebert 3y ago
  It depends on what you mean by free market, it's often used interchangeably with with laissez-faire capitalism but an important concept in a free market is that the barrier to entry for new competitors should be as low as realistically possible, so regulation that prevents vendor lock-in can be pro free market.

qeternity 3y ago

I say this as someone who only uses AWS for DR backups: hosting infra is one of the most competitive industries out there. Major cloud costs are exorbitant but that should be interpreted as proof of a great product. I shudder at paying 9c/gb egress but apparently many others do not.

vidarh 3y ago
Same. I use Hetzner and DigitalOcean for my own stuff, and shudder at AWS costs. At the same time both my current and previous employers use AWS and it's fine for their user because revenue is (very) high relative to the cloud resource usage, and that is a situation where cloud usage is fine. But so many - B2C in particular - businesses who uses cloud have tight enough margins that they're just setting themselves up for being disrupted by a competitor with tighter cost control.
cntainer 3y ago
The magic of cloud is how quickly you can scale things up. If you're a new fast growing business it will give you a competitive edge. If you drank to cloud kool-aid from the beginning you kind of get used to huge costs for simple services so it's easier for your brain to justify paying 10k a month for a simple web app deployed in kubernetes, using cosmos db and any other number of services. I've seen many companies that started on the cloud and their core architecture is so interleaved with the cloud that it would a huge investment to reduce that dependency and switch.
- oarsinsync 3y ago
  > The magic of cloud is how quickly you can scale things up I see this spouted a lot, but my recent (last 6 months?) experience with AWS is that unless I pay up front to reserve a tonne of high end instances that I don’t necessarily need today, but might need tomorrow, I’m regularly running into capacity issues where I cannot spin up new instances of the metal that I want, and AWS support confirms they just don’t have the capacity unless we pay to reserve it up front. At that point, it’s no different to running my own DC, where I already have 3 months of runway on my server pipeline anyway.
  - dageshi 3y ago
    I wonder what the cause of that is? I think I've heard this sentiment elsewhere recently but I don't recall it in the past. So what's caused the capacity constraint?
    - oarsinsync 3y ago
      The risk to Amazon of enabling you to scale up low end instances on demand is relatively low. The risk of doing the same with high end instances is a different story. Low risk & high margin products make for a highly profitable business. High risk and lower margin products less so. Their target audience is people that can be equally well served by digital ocean and their ilk, but are happy to pay the Amazon premium. It’s a good business model for Amazon, and a terrible value proposition for the customer who may not know better, and thinks they’re paying to de-risk their potential future growth requirements. The cost of migrating out then becomes prohibitive (both in technical hours and egress fees), so you like it or lump it, but either way, you likely just wait and/or pay Amazon more. Until you can’t.
- re-thc 3y ago
  > The magic of cloud is how quickly you can scale things up. If you're a new fast growing business it will give you a competitive edge. The magic if there is 1 is not the scale but the free credits. Startups can go years without paying and then it's all too late. Scale is meaningless when it costs 10x more. Just have spare capacity and lots of it.
ClumsyPilot 3y ago
> hosting infra is one of the most competitive industries out there. Here is an experiment - tell your employer you will be hosting on (insert no-name provider here), to same a literal million dollars, and see if you can get security team to sign off on it. Here is another experiment - reach out to he security team, and tell them AWS costs are too high, ask them which providers they will be ready and willing to sign off. My guess is it will not be a big list beyond AWS/Azure/GCP. So the market is not competitive at all, most of us cannot switch providers even if the alternative would be 100x better. PS: I am not saying security team are assholes, I am pointing out a major barrier to competition.
- hkt 3y ago
  I remember the sad case of DataCentred: https://www.datacenterdynamics.com/en/news/datacentred-is-shutting-down-after-losing-hmrc-as-a-customer/ https://www.datacenterdynamics.com/en/news/datacentred-is-sh... tl;dr even after getting a big public sector contract, a UK based cloud provider was killed off after scaling to meet demand which was then withdrawn. Attaining - and keeping - scale is extremely difficult. And that was just IaaS provision.
  - nly 3y ago
    If you're scaling your whole business for one customer based on one contract then you better be sure you can either scale down again, or the contract has safeguards in it to stop a rugpull.
    - hkt 3y ago
      You're not wrong, but the public sector should probably not be pulling the rug out from underneath anyone.
- midasuni 3y ago
  No one ever got fired for buying AWS
  - 3y ago
hkt 3y ago
The summary of findings confirms that IaaS is competitive, PaaS less so, SaaS even less than that.
Jochim 3y ago
Major cloud costs are also proof that finance departments hate additional vendors.

madaxe_again 3y ago

A free market always results in monopoly - it is the nature of capital to accrue and concentrate. This is the old unpopular Hayek/Friedman “classic liberal” position, that markets and industry should be heavily regulated and taxed.

cbeach 3y ago

At least free markets -allow- competition. In socialism/communism all sectors become state monopolies, with no market incentive to provide a decent service, nor to compensate workers fairly.

becquerel 3y ago
There is no state in communism.
- cnity 3y ago
  This is a very weird claim: https://en.wikipedia.org/wiki/Communist_state https://en.wikipedia.org/wiki/Communist_state. Unless you are talking about the theoretical "pure communism" which is fiction/fancy and we may as well be talking about utopia.
happymellon 3y ago
You don't appear to understand what Socialism is. It makes sense with this being an American site, and most Americans think that Socialism is essentially the same thing as Communism (but then why define them as separate things?). Community, Cooperative, Employee owned are all forms of socialism. None of them prevent competition. > no market incentive to provide a decent service, nor to compensate workers fairly. If you owned part of the company you worked for, you would be more likely to provide good service as that would then have repeat business and would directly financially impact you. The performance of the business is the only way you would get paid and as there are no shareholders the company would compensate rather than dividend. Your comment makes absolutely no sense, socialism doesn't prevent free markets.
- cbeach 3y ago
  Socialism is state ownership of the means of production. "Community, Cooperative, Employee owned" are all concepts that can (and do) exist under a capitalist regime. Socialism is very different, and it does prevent free markets.

globular-toast 3y ago

Do people even understand what "free market" means? A free market is one with low or no barriers to entry for suppliers and perfect information available to consumers such that they can always make the optimal choice. How can anyone, especially on this site, think the cloud market is anywhere close to being free? I think people are confused thinking free market means no regulation. No regulation leads to monopoly which is the furthest from a free market you can possibly get. People who seriously advocate for such things are ignorant fools. There are countless examples of how markets fail and that's why every major economy in the world has a government.

stuaxo 3y ago

Indeed, does a free market ensure a monopoly in the end ?

rguillebert 3y ago
It depends on what you mean by free market, it's often used interchangeably with with laissez-faire capitalism but an important concept in a free market is that the barrier to entry for new competitors should be as low as realistically possible, so regulation that prevents vendor lock-in can be pro free market.