7 ms·

Jeff Bezos is using Bill Gates' playbook from the 1990's: build alternatives to the most popular apps on your platform; bundle them; and improve app quality ove

by peterb 12y ago

Jeff Bezos is using Bill Gates' playbook from the 1990's: build alternatives to the most popular apps on your platform; bundle them; and improve app quality over time. This business strategy is very hard for a company like dropbox to compete against, even if they have better IP/quality/features. Edit: we can also expect Amazon versions of "knife the baby", "cut off their air supply" and "DOS ain't done until Lotus won't run".

driedtoast 12y ago
I agree, this might cut into more of box.net's offering than dropbox though.
- rufugee 12y ago
  Afaik, it's not competitively priced for large volume. We priced around 650 users for box, and it came out to be roughly $8K annually. At $5/month/user, the Amazon offering would be roughly $40K annually. I'd actually prefer to go the Amazon route, but they're going to have to offer volume discounts to make it compelling.
  - MichaelApproved 12y ago
    If you have 650 users (who I'm assuming are paid employees), doesn't the cost become marginal in comparison to improved productivity? I would guess the time to re-train all 650 on a new platform and the ease of transferring existing files would be more meaningful than the price difference.
  - ranvir 12y ago
    $8k annually for 650 users is about $1 per month per user vs a $15 list price. Is that right?
    - rufugee 12y ago
      I'm actually waiting for clarification on this...I think my team might've misinterpreted the quote, and if so, Amazon would be significantly cheaper. I'll update as soon as I know (most likely Monday).
callmeed 12y ago
Can you expand on the "knife the baby" move? That one's not in my playbook. Is a riff off the Solomon/baby story?
- sp332 12y ago
  http://www.businessweek.com/microsoft/updates/up81105b.htm http://www.businessweek.com/microsoft/updates/up81105b.htm
  - maschineninja 12y ago
    Yap
  - gcb0 12y ago
    i have to laugh at this. the main point of quicktime was to work as bait and switch. and microsoft having invented the tactics, defended against it. after microsft lost that one, apple itself made quicktime (and then itunes) incredible slow and bogus on windows. while previous versions were just fine.
    - skyebook 12y ago
      Did that really happen? My iTunes library lived primarily on a Windows box until 2 years ago and the only weirdness I can think of was Apple breaking some of Microsoft's windowing conventions. To be fair, the MS Office experience on OS X is about the same: pretty normal with some things slightly off.
      - moheeb 12y ago
        Yes. Quicktime back then was like having AIDS; you didn't want your friends to find out it was on your box.
      - gcb0 12y ago
        if itunes and quicktime was never slow on your windows box, then i can say with certainty that you changed computers at least every year and always to expensive models.
brador 12y ago
Is there anywhere to view analysis of gates' business strategies over the years? Article, book, anything?
- pc 12y ago
  I've enjoyed reading the various strategy memos that emerged as part of the DoJ's antitrust case.
  - jamiequint 12y ago
    Hey Patrick, do you have a link to a collection of those?
    - wmorein 12y ago
      http://antitrust.slated.org/www.iowaconsumercase.org/ http://antitrust.slated.org/www.iowaconsumercase.org/
  - alexitosrv 12y ago
    Do you have a link or something?
Crito 12y ago
FireOS ain't done until Google Play won't run?
- peterb 12y ago
  More like "S3 ain't shipping until dropbox files are missing" or "EC2 doesn't go until Netflix is slow".
adultSwim 12y ago
i.e. anti-trust violations
- colechristensen 12y ago
  It was anticompetitive for Microsoft in the mid-90s because they had a very solid monopoly over the personal computer operating system market. A case against Amazon would be much weaker because they don't even have a majority of the market much less a monopoly.
  - devcpp 12y ago
    You shouldn't have to already be a monopoly to have your acts qualified as anti-trust. Just like the law should punish you for trying to scam people even though your scam didn't work. Otherwise, everyone would at least try to scam everyone else and would at least try to become a monopoly, since it costs nothing unless you win. And if you do win, the fine won't reach the amount you put in the bank (at least in the case of monopolies, e.g Microsoft).
    - baddox 12y ago
      Unfortunately, antitrust cases are aimed at market share, rather than how the market share was acquired or what business practices the firm uses.
      - chipotle_coyote 12y ago
        Speaking broadly, that's not true. Monopolies are not intrinsically illegal. Antitrust law is specifically about business practices, and the notion that monopolies have to be more restricted because they can use their domination of one market to affect related markets. What got Microsoft into trouble wasn't having 90% of the operating system market, it was the allegation that they were using that monopoly to take over the nascent browser market, force OEMs to accept terms that prevented alternative OSes from competing on level ground, and so on. I suspect Amazon is on their way to running afoul of such laws, or would be if the current business climate wasn't comparatively hostile to the notion of this kind of regulation. I don't think, however, that Zocalo is going to be a piece that attracts much attention; it's going to be the way Amazon seems to increasingly deal with their suppliers in Walmart-esque fashion. (Walmart was notorious for going beyond merely asking for "large customer" discounts and heading into "we will tell you what wholesale price we're going to pay, and you will either make it work or you'll lose the 60-70% of your business we represent.")
jmsdnns 12y ago
Straight out of Dealing With Darwin, by Geoffrey Moore, too.
dgallagher 12y ago
One big thing Zacolo has over Dropbox is cheaper pricing. Dropbox for Business is $15/mo [1] per user (can be up to 30% cheaper if you pay in-full for a year), where-as Zacolo is $5/mo [2] per user. That'll put downward pressure on Dropbox's corporate pricing unless they have much better service, or much better features, than Amazon. [1] https://www.dropbox.com/business/buy https://www.dropbox.com/business/buy [2] https://aws.amazon.com/zocalo/pricing/ https://aws.amazon.com/zocalo/pricing/
- tachyonbeam 12y ago
  I'm a dropbox customer. I'll be staying with them for the foreseeable future, but I'm glad to see competition might bring me more space and/or cheaper pricing.
- praeivis 12y ago
  Must be because Dropbox still use Amazon services to store client files.
leccine 12y ago
Yes, it is called competition. :)

by peterb 12y ago

driedtoast 12y ago

I agree, this might cut into more of box.net's offering than dropbox though.

rufugee 12y ago
Afaik, it's not competitively priced for large volume. We priced around 650 users for box, and it came out to be roughly $8K annually. At $5/month/user, the Amazon offering would be roughly $40K annually. I'd actually prefer to go the Amazon route, but they're going to have to offer volume discounts to make it compelling.
- MichaelApproved 12y ago
  If you have 650 users (who I'm assuming are paid employees), doesn't the cost become marginal in comparison to improved productivity? I would guess the time to re-train all 650 on a new platform and the ease of transferring existing files would be more meaningful than the price difference.
- ranvir 12y ago
  $8k annually for 650 users is about $1 per month per user vs a $15 list price. Is that right?
  - rufugee 12y ago
    I'm actually waiting for clarification on this...I think my team might've misinterpreted the quote, and if so, Amazon would be significantly cheaper. I'll update as soon as I know (most likely Monday).

callmeed 12y ago

Can you expand on the "knife the baby" move? That one's not in my playbook. Is a riff off the Solomon/baby story?

sp332 12y ago
http://www.businessweek.com/microsoft/updates/up81105b.htm http://www.businessweek.com/microsoft/updates/up81105b.htm
- maschineninja 12y ago
  Yap
- gcb0 12y ago
  i have to laugh at this. the main point of quicktime was to work as bait and switch. and microsoft having invented the tactics, defended against it. after microsft lost that one, apple itself made quicktime (and then itunes) incredible slow and bogus on windows. while previous versions were just fine.
  - skyebook 12y ago
    Did that really happen? My iTunes library lived primarily on a Windows box until 2 years ago and the only weirdness I can think of was Apple breaking some of Microsoft's windowing conventions. To be fair, the MS Office experience on OS X is about the same: pretty normal with some things slightly off.
    - moheeb 12y ago
      Yes. Quicktime back then was like having AIDS; you didn't want your friends to find out it was on your box.
    - gcb0 12y ago
      if itunes and quicktime was never slow on your windows box, then i can say with certainty that you changed computers at least every year and always to expensive models.

brador 12y ago

Is there anywhere to view analysis of gates' business strategies over the years? Article, book, anything?

pc 12y ago
I've enjoyed reading the various strategy memos that emerged as part of the DoJ's antitrust case.
- jamiequint 12y ago
  Hey Patrick, do you have a link to a collection of those?
  - wmorein 12y ago
    http://antitrust.slated.org/www.iowaconsumercase.org/ http://antitrust.slated.org/www.iowaconsumercase.org/
- alexitosrv 12y ago
  Do you have a link or something?

Crito 12y ago

FireOS ain't done until Google Play won't run?

peterb 12y ago
More like "S3 ain't shipping until dropbox files are missing" or "EC2 doesn't go until Netflix is slow".

adultSwim 12y ago

i.e. anti-trust violations

colechristensen 12y ago
It was anticompetitive for Microsoft in the mid-90s because they had a very solid monopoly over the personal computer operating system market. A case against Amazon would be much weaker because they don't even have a majority of the market much less a monopoly.
- devcpp 12y ago
  You shouldn't have to already be a monopoly to have your acts qualified as anti-trust. Just like the law should punish you for trying to scam people even though your scam didn't work. Otherwise, everyone would at least try to scam everyone else and would at least try to become a monopoly, since it costs nothing unless you win. And if you do win, the fine won't reach the amount you put in the bank (at least in the case of monopolies, e.g Microsoft).
  - baddox 12y ago
    Unfortunately, antitrust cases are aimed at market share, rather than how the market share was acquired or what business practices the firm uses.
    - chipotle_coyote 12y ago
      Speaking broadly, that's not true. Monopolies are not intrinsically illegal. Antitrust law is specifically about business practices, and the notion that monopolies have to be more restricted because they can use their domination of one market to affect related markets. What got Microsoft into trouble wasn't having 90% of the operating system market, it was the allegation that they were using that monopoly to take over the nascent browser market, force OEMs to accept terms that prevented alternative OSes from competing on level ground, and so on. I suspect Amazon is on their way to running afoul of such laws, or would be if the current business climate wasn't comparatively hostile to the notion of this kind of regulation. I don't think, however, that Zocalo is going to be a piece that attracts much attention; it's going to be the way Amazon seems to increasingly deal with their suppliers in Walmart-esque fashion. (Walmart was notorious for going beyond merely asking for "large customer" discounts and heading into "we will tell you what wholesale price we're going to pay, and you will either make it work or you'll lose the 60-70% of your business we represent.")

jmsdnns 12y ago

Straight out of Dealing With Darwin, by Geoffrey Moore, too.

dgallagher 12y ago

One big thing Zacolo has over Dropbox is cheaper pricing. Dropbox for Business is $15/mo [1] per user (can be up to 30% cheaper if you pay in-full for a year), where-as Zacolo is $5/mo [2] per user. That'll put downward pressure on Dropbox's corporate pricing unless they have much better service, or much better features, than Amazon. [1] https://www.dropbox.com/business/buy https://www.dropbox.com/business/buy [2] https://aws.amazon.com/zocalo/pricing/ https://aws.amazon.com/zocalo/pricing/

tachyonbeam 12y ago
I'm a dropbox customer. I'll be staying with them for the foreseeable future, but I'm glad to see competition might bring me more space and/or cheaper pricing.
praeivis 12y ago
Must be because Dropbox still use Amazon services to store client files.

leccine 12y ago

Yes, it is called competition. :)