Obviously, failing to look ahead is a mistake. But it is also a mistake to project too far ahead. Remember Keynes' famous aphorism: "In the long run, we are all

Obviously, failing to look ahead is a mistake. But it is also a mistake to project too far ahead. Remember Keynes' famous aphorism: "In the long run, we are all dead." You're thinking in equilibrium terms. Yes, it's easy to imagine that one day this business will reach a low-margin equilibrium. Though that doesn't guarantee it will happen in our lifetimes. (An example of a factor that mitigates against it: Monopolies. Get a monopoly, and you can keep margins artificially high.) And just because something will eventually be commoditized doesn't mean it will never be a high margin business. Margins can be quite high at the beginning. And, if you stay out of the business because you're afraid of what will happen in ten years, you miss out on all that money that's on the table now. Just imagine if Microsoft had been unwilling to release Windows 95 because it was obvious that in ten years we'd all be trying to switch to Unix. The electronic component industry knows all about this curve. Component manufacturers race to ramp up early production of a new part, because the part sells for higher margins when it is first to market. Within a year or two other manufacturers will clone your part, or invent alternatives, and your margins will drop to tiny levels. But by then you'll hopefully have ramped up something else. The business has worked that way for a long time. In the case of this new Amazon service... I have never heard of Hadoop before. By releasing a turnkey service with big fanfare, Amazon will grow the market to include people like me. Because we have no clue what we're doing at first, they can charge us high margins for a standardized, widespread service with a relative wealth of documentation and buzz and (perhaps) some tech support. Eventually the market will stop growing, the customers will be educated and start hunting for bargains... and Amazon will move on to something else.