undefined | Better HN

0 pointsvidarh5mo ago0 comments

My favorite Jeff Bezos quote is one that applies very much to AWS: "your margin is my opportunity".

Clearly when Amazon realised the enormous potential in AWS, they scrapped that principle. But the idea behind it - that an organisation used to fat margins will not be able to adapt in the face of a competitor built from the ground to live of razor thing margins - still applies.

AWS is ripe for the picking. They "can't" drop prices much, because their big competitors have similar margins, and a price war with them would devastate the earnings of all of them no matter how much extra market share they were to win.

The challenge is the enormous mindshare they have, and how many people are emotionally invested even in believing AWS is actually cost effective.

0 comments

master_crab5mo ago

"your margin is my opportunity"

Yup, that phrase was running through my head as I skimmed the comments.

To that, an interesting observation I’ve made is that their frequency for service price cuts have dropped in the past several years. And the instances of price increases have started to trickle in (like the public IP cost).

If core compute and network keep getting cheaper faster than inflation, and they never drop their prices (or drop them by less relatively) the margins are growing.

hylaride5mo ago

The worst aspect of AWS is that once you get to a certain size, you can negotiate bulk agreements, especially for things like bandwidth. At a previous job, we cut our bill down by quite a bit this way, but it was annoying to have to schmooze with sales people.

vidarhOP5mo ago

Great you're pointing it out, as this is also something a lot of organisations are entirely unaware of in my experience.

If you're paying more than a few hundred k/year (worth starting to try below that; success rates will vary greatly) and are still paying the list prices, you might as well set fire to money.

j / k navigate · click thread line to collapse