5 ms·
>> 150M at 5B revenue is not great: that's 3% margin! and yet everybody - including Microsoft - is in a big rush to sell us AI services, which could look an aw
by skeeter2020 3mo ago
>> 150M at 5B revenue is not great: that's 3% margin!
and yet everybody - including Microsoft - is in a big rush to sell us AI services, which could look an awful lot like a historical utility business. 3% will be a dream return in that scenario!
- monocasa 3mo agoAWS is essentially a utility and gets way better than 3%.
- risyachka 3mo agoAws is closer to monopoly than to utility
- monocasa 3mo agoMost utilities are monopolies.
- bluGill 3mo agomost utilities are natural monopolies. The cost to run wires/pipes to my house are a significant portion of the cost to serving me, so you wouldn't run wires to my house in hopes that I buy from you later.
- groundzeros2015 3mo agoA monopoly with at least 3 major competitors and which exists because it created a new thing, not because it controls a fixed shared resources.
- mike_hearn 3mo agoAWS isn't a utility because utilities sell commodities for which you can switch to a competitor easily, as you're buying the same thing. There are companies selling similar products to AWS but none that sell AWS itself.
- monocasa 3mo agoEarly utilities tend to not be built on standards. See how early electric utilities within a country or even a city couldn't agree on voltage, frequency, phase, or even AC vs DC.
- hollerith 3mo agoStill, there is a difference of degree. The engineering cost of making one city's electrical grid compatible with the consumers of a different city's grid were much lower (even if one grid was AC and the other DC) than the engineering cost of moving from AWS to a competitor because electricity is not that complicated. Also, I doubt anyone was referring to electricity as a commodity in the early days before the industry developed standards.
- philistine 3mo agoThe fact that electricity was quickly commoditized does not guarantee that AWS will commoditize.
- brianwawok 3mo agoS3 is. But obviously not all of it.