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The article suggests that people (who?) believed AWS was a low-margin business. Why would anyone think that? (And who?)
by awda 13y ago
The article suggests that people (who?) believed AWS was a low-margin business. Why would anyone think that? (And who?)
- deleted 13y ago[deleted]
- bertil 13y agoNot sure if you are being sarcastic, but the group Amazon and its founder Jeff Bezos have clearly indicated this was their business philosophy. I have to agree that it sounds odd when it comes to something with the cost structure of hosted services, but at a certain scale, it makes sense.
- qq66 13y agoAmazon is very calculating when it comes to operating at low margin. What they mean by running a low margin business is that their operations are capable of running at close to zero margin for almost any product they carry. When they can, they charge high margins and get to have all the extra surplus. When competition thickens up, they reduce the prices to undercut all the other guys. AWS pricing is where this happens the least, by the way, since the prices move so infrequently. In other product categories like DVDs and household items, prices moves up and down almost daily in response to changing market conditions.
- wmf 13y agoMaybe because Bezos is always talking about low margins.
- film42 13y agoTrue, but amazon will intelligently price cut any competitor. Meaning, perhaps the margins aren't always so tiny, but they're prepared should the market require it.
- late2part 13y agoAgreed. Any "low margin" business that can do 30% price cuts in one day is not low margin.