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So, when Google and Amazon will fail?

by deely3 2y ago

packetlost 2y ago
Google will fall very slowly as it gradually degrades in public image and engineering quality. It weathers the oncoming storm better than most others simply because it did not invest heavily in cloud as a product and source of revenue. Instead it's mostly a way to make marginal dollars to offset some of the upfront and operating costs of infrastructure it already had and needed to continue to build. Amazon will probably go much quicker as they primarily make their money from providing cloud services, subsidizing their delivery network and storefront with money made from the high margin cloud products. Microsoft is similarly betting very hard on cloud and AI, moving its bread and butter business services (ActiveDirectory, Office Suite, Windows) to subscription model SaaS products while spending billions on AI infrastructure and integrations. When the AI bubble pops, it takes most of the Fortune 500 (primarily in the Fortune 10) with it. VC investment dollars for fast growth startups dry up as portfolios prefer more conservative, stable growth businesses. Consumer spending nosedives, primarily effecting Amazon as the razor thin margins of its delivery network start getting eaten into by less volume without reduction in op-ex. It increases margin on cloud products to compensate. Nvidia retains a sizable chunk of its AI driven valuation. Microsoft, who bet hard on cloud and AI hurts, badly. They dramatically raise prices, starting with their government cloud customers, but public cloud quickly follows suit. Businesses look to alternatives, shifting towards owning their own "private clouds". Oxide computing is eating good. Oracle, who has been building data centers for AI workloads, suddenly has excess of capacity freed up by the drop in investment for AI. They either invest in their own low-margin, primarily self managed cloud infrastructure or go all in on being the American Hetzner, selling U-s and racks populated with (by this point) last generation hardware that businesses are moving towards as their IT op-ex budgets get slashed and are forced to cut costs by decreasing infrastructure spend at the cost of reduced quality and shouldering the risk of failed hardware and poor security posture. SysAdmin and DevOps roles start focusing more heavily on fundamentals instead only particular IaaS platforms and APIs, similar for dev roles. Meanwhile, Microsoft is on the brink of collapse. It sells off its Office suite to Intuit, Xbox turns into a certification platform for PC-prefabs and gets sold to Tencent. Windows continues to exist, but struggles as the new generation entering the workforce primarily uses browsers and chromebooks and businesses shift harder towards Linux and ChromeOS as the workstation OSes of choice because of costs and ease of management using free, self-managed platforms or small up and coming competitors to ActiveDirectory. Amazon and Google struggle but survive. Microsoft gets broken up and follows in IBMs footsteps and fades out of relevance.
jasfi 2y ago
They fail operationally at serving the customer in those cases. But if the % of that happens is low enough, then strategically it doesn't affect them.

So, when Google and Amazon will fail?

by deely3 2y ago

So, when Google and Amazon will fail?

Google will fall very slowly as it gradually degrades in public image and engineering quality. It weathers the oncoming storm better than most others simply because it did not invest heavily in cloud as a product and source of revenue. Instead it's mostly a way to make marginal dollars to offset some of the upfront and operating costs of infrastructure it already had and needed to continue to build. Amazon will probably go much quicker as they primarily make their money from providing cloud services, subsidizing their delivery network and storefront with money made from the high margin cloud products. Microsoft is similarly betting very hard on cloud and AI, moving its bread and butter business services (ActiveDirectory, Office Suite, Windows) to subscription model SaaS products while spending billions on AI infrastructure and integrations. When the AI bubble pops, it takes most of the Fortune 500 (primarily in the Fortune 10) with it. VC investment dollars for fast growth startups dry up as portfolios prefer more conservative, stable growth businesses. Consumer spending nosedives, primarily effecting Amazon as the razor thin margins of its delivery network start getting eaten into by less volume without reduction in op-ex. It increases margin on cloud products to compensate. Nvidia retains a sizable chunk of its AI driven valuation. Microsoft, who bet hard on cloud and AI hurts, badly. They dramatically raise prices, starting with their government cloud customers, but public cloud quickly follows suit. Businesses look to alternatives, shifting towards owning their own "private clouds". Oxide computing is eating good. Oracle, who has been building data centers for AI workloads, suddenly has excess of capacity freed up by the drop in investment for AI. They either invest in their own low-margin, primarily self managed cloud infrastructure or go all in on being the American Hetzner, selling U-s and racks populated with (by this point) last generation hardware that businesses are moving towards as their IT op-ex budgets get slashed and are forced to cut costs by decreasing infrastructure spend at the cost of reduced quality and shouldering the risk of failed hardware and poor security posture. SysAdmin and DevOps roles start focusing more heavily on fundamentals instead only particular IaaS platforms and APIs, similar for dev roles. Meanwhile, Microsoft is on the brink of collapse. It sells off its Office suite to Intuit, Xbox turns into a certification platform for PC-prefabs and gets sold to Tencent. Windows continues to exist, but struggles as the new generation entering the workforce primarily uses browsers and chromebooks and businesses shift harder towards Linux and ChromeOS as the workstation OSes of choice because of costs and ease of management using free, self-managed platforms or small up and coming competitors to ActiveDirectory. Amazon and Google struggle but survive. Microsoft gets broken up and follows in IBMs footsteps and fades out of relevance.

jasfi 2y ago

They fail operationally at serving the customer in those cases. But if the % of that happens is low enough, then strategically it doesn't affect them.