Comment by coliveira
So much worse for American companies. This only means that they will be uncompetitive with similar companies that use models with realistic costs.
So much worse for American companies. This only means that they will be uncompetitive with similar companies that use models with realistic costs.
Is a “cheaper” service going to come along and upend Google or Facebook?
I’m not saying this to insult the technical capabilities of Uber. But it doesn’t have the economics that most tech companies have - high fixed costs and very low marginal costs. Uber has high marginal costs saving a little on inference isn’t going to make a difference.
All the American cars (Ford, Chevrolet, GM...) are much cheaper in Europe than eg. German cars from their trifecta (and other Europe-made high end vehicles from eg Sweden, Italy or UK), and on par with mid-priced vehicles from the likes of Hyundai, Kia, Mazda...
Obviously, some US brands do not compete on price, but other than maybe Jeep and Tesla, those have a small market penetration.
> I can’t think of a single major US company that is big internationally that is competing on price.
All the clouds compete on price. Do you really think it is that differentiated? Google, Amazon and Microsoft all offer special deals to sign big companies up and globally too.
I worked inside AWS consulting department for 3 years (AWS ProServe) and now I work as a staff consultant for a 3rd AWS partner. I have been on enough sales calls, seen enough go to market training materials and flown out to customers sites to know how these things work. AWS has never tried to compete as the “low cost leader”. Marketing 101 says you never want to compete on price if you can avoid it.
Microsoft doesn’t compete on price. Their major competitive advantage is Big Enterprise is already big into Microsoft and it’s much easier to get them to come onto Azure. They compete on price only when it comes to making Windows workloads Bd SQL Server cheaper than running on other providers.
AWS is the default choice for legacy reasons and it definitely has services an offerings that Google doesn’t have. I have never once been on a sales call where the sales person emphasizes that AWS is cheaper.
As far as GCP, they are so bad at evterprise sales, we never really looked at them as serious competition.
Sure AWS will throw credits in for migrations and professional services both internally and for third party partners. But no CFO is going to look at just the short term credits.
> AWS has never tried to compete as the “low cost leader”. Marketing 101 says you never want to compete on price if you can avoid it.
Despite all that and whatever you say, the fact is you do compete. It doesn't have to be a race to the bottom.
So Cloudfront free tier and the latest discount bundles etc aren't to compete? People have also negotiated private pricing way below list price and a lot cheaper than competitors.
Similarly was the Dynamodb price cuts not due to competition?
I can give way more examples...
I am well aware that Netflix doesn’t pay the same price for AWS services that “Joe Bob’s Fish Tackle and WordPress shop”. All big companies give discounts to large companies as part of negotiations which is different from “we are the low cost leader”.
All technology gets cheaper over time. There is a difference between lowering price in response to competitors and finding the profit maximizing price based on supply and demand.
AWS was lowering prices to increase demand before GCP and Azure were a thing.
Jassy said right before he became CEO of Amazon and he was still over AWS that only 5% of IT spend was on any cloud provider. They are capturing non consumption and marketing value of AWS vs that.
While I don’t have any insider experience about Azure, looking on the outside, I would think that Azure’s go to market is also not competing against AWS on price, but trying to get on prem customers on Azure.
I can’t think of a single major US company that is big internationally that is competing on price.