

Can Amazon Run The Table On Cloud Services? - brlewis
http://www.avc.com/a_vc/2009/03/can-amazon-run-the-table-on-cloud-services.html

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mdasen
It depends. Amazon started out really cheap with 1.7GB servers in 2006.
However, it's now 2009 and the prices are the same. At that point in time,
Linode had their 400MB instances for $80 (which became 512 which became 1024
which became 1200 which became 1440 over the years). Slicehost had just been
founded at the same time EC2 came around and I remember the big waiting list
as they became popular.

So, I don't think that Amazon can become dominant unless it offers more for
less. Their EBS (elastic block storage) is a good offering that's really
attractive, but they're starting to look expensive. Slicehost will give me an
8GB box with 2TB of transfer for $450. Amazon would cost $628 for that (40%
more). Even if you commit to a 3-year term and pay $2,000 up-front, you still
only bring the cost down to $500.

It will really depend on whether Amazon keeps prices down. Their competitors
will have the ability to lower prices as hardware improves. If Amazon doesn't
follow suit, they won't last. Right now, there aren't too many providers, but
Xen knowledge is getting out there and more companies will start offering the
same thing.

Amazon is doing well now. They need to keep driving costs down to remain
competitive in an industry where many providers will start being
interchangeable.

~~~
moe
I think the big deal about amazon is dependability, elasticity and the addon
services for now.

They are the 400 pound gorilla. I can order ten 1TB EBS volumes right now and
they will deliver in a blink. I'm not sure if slicehost can do that, yet.

They have CloudFront which lets me stop worrying about latency, even for
overseas customers, at the flick of a button.

They have DevPay, SimpleDB, SQS and such which I don't use but it's there
should I need it.

In terms of elasticity they truly let me pay for what I use. At slice I have
to commit upfront to traffic and diskspace. Yes, up- and downgrading slices is
possible but it's not nearly as seamless as with amazon - where you just do
nothing.

For now I think the amazon markup is still justified. But you are right, if
the gap widens too much then they'll start losing customers.

