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The cost of switching is just too high. This is true for their "competion" too. We can see this when researching the books as published to shareholders. When A

by berkes 2y ago

The cost of switching is just too high. This is true for their "competion" too. We can see this when researching the books as published to shareholders. When AWS was the "sole" player (first mover advantage) they had insane margins. Then competition stood up: GCP, Azure etc. And grew. Their margin has staid the same. And is roughly similar to that of GCP and Azure. Which means they either have secret gentlements agreement over pricing (highly illegal, not likely, the risk is just too high) or there's other mechanisms at play that allow them to keep dictating the price. Cost of switching is very likely such a mechanism. They lure you "on board" then once you start feeling the pain of the high margins, there's simply no way you can move to a competitor with lower margins - either that competitor isn't one really (Digital Ocean, OVH, Linode) or these competitors aren't competing on your margin (GCP, Azure) and have similar margins.

AmericanChopper 2y ago
The issue with the “cost of switching” line of reasoning is that it’s not possible to offer the services that AWS, GCP, Azure do, without having a high cost of switching. As a baseline, moving production workloads that run entirely on VPS or physical servers between datacenters is already a very high cost/high effort task. Anything you do to make the architecture more complicated is going to increase those costs. All AWS (and co) did was offer a platform for building complicated architectures. The market response was overwhelmingly positive, and entire new engineering disciplines sprung up around managing and building these new complicated architectures. Migrating them is typically rather difficult and high cost, but everybody knew this from the beginning, and this is what the customers want. The PaaS providers could maybe do something here or there to make it easier, but there’s nothing they can do to address the fundamental problem.

by berkes 2y ago

AmericanChopper 2y ago

The issue with the “cost of switching” line of reasoning is that it’s not possible to offer the services that AWS, GCP, Azure do, without having a high cost of switching. As a baseline, moving production workloads that run entirely on VPS or physical servers between datacenters is already a very high cost/high effort task. Anything you do to make the architecture more complicated is going to increase those costs. All AWS (and co) did was offer a platform for building complicated architectures. The market response was overwhelmingly positive, and entire new engineering disciplines sprung up around managing and building these new complicated architectures. Migrating them is typically rather difficult and high cost, but everybody knew this from the beginning, and this is what the customers want. The PaaS providers could maybe do something here or there to make it easier, but there’s nothing they can do to address the fundamental problem.