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Looking at the fact that you can do encoding across a lot of different regions seems to me to indicate that there isn't any special capabilities required for Am
by newhouseb 14y ago
Looking at the fact that you can do encoding across a lot of different regions seems to me to indicate that there isn't any special capabilities required for Amazon to implement this other than just a custom AMI.
If I had to guess, this is all part of a strategy to figure out ways to utilize their idle fleet. Spot instances are often used for these sorts of batch offline compute-intensive jobs, but if you're a third party you are hostage to the market dynamics (changing prices of spot instances). Since Amazon owns the market, they can just take capacity out of the fleet of available as spot instances instantaneously for free and be immune to pricing changes in the spot-instance market - something no competitor could ever do.
So if you were to ask - what is a common batch-style workload that requires a lot of computing power that a lot of people need who would otherwise not be using our spot instances and that can consume our idle capacity? I can't think of a better market than video encoding.
This is certainly scary for companies like Zencoder, and feels somewhat anticompetitive (IANAL so speaking practically rather than legally), but it makes otherwise good sense as a business strategy.
- stanleydrew 14y agoI'm not sure how it's anti-competitive, unless in six months Amazon tries to shut down Zencoder's or some other competitor's Amazon account, which I can't really see happening.
- newhouseb 14y agoIt's more implicit due to the underlying economics than explicitly so. As long as Zencoder runs on AWS, barring some magic encoding technology, it can never be cheaper than Amazon could theoretically go. This assumes that transcoding services are competitive primarily along price (which may be an incorrect assumption - I'm not in the business). The bottom limit of the price Amazon can charge is a function of their dominant (but admittedly not monopolistic) position in the cloud computing market.
- kcg 14y agoThat's not anticompetitive though, it's purely competitive. Amazon has better underlying economics (because it has deployed capital to build infrastructure) and therefore is able to offer the same service at a lower price.
- njharman 14y agoNot saying this is the case. But there is such a thing as a vertical monopoly. Anticompetitive and illegal.
- jessaustin 14y agoIt's very hard to imagine a situation in which Amazon could lock new entrants out of the video encoding market. All you need to enter this market are a fast connection and a server farm, both of which you can get for yourself or rent from numerous IaaS providers. Amazon might very well have a price advantage, but other parties that can offer better quality of service or better L10n or whatever will still attract customers. This is how markets are "supposed" to work.
- jbigelow76 14y ago>As long as Zencoder runs on AWS, barring some magic encoding technology, it can never be cheaper than Amazon could theoretically go. Nobody is forcing Zencoder to stay on AWS, if it no longer makes business sense to stay there then they need to move. If Zencoder believes that isn't feasible they need to find different value adds to make themselves more attractive than Amazon. This isn't anti-competitive at all.
- glanch 14y agoZencoder __had__ to realize Amazon getting into this space was a possibility/inevitability though, right?