

How to bet on the bubble? (with list of 2010/11 YC startup hosting providers) - gpjt
http://www.gilesthomas.com/?p=480

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kls
I am sorry but this article gets it all wrong, while we may be in a bubble the
reasons for choosing AWS are obvious and the reason startups are choosing are
even more obvious. Startups have not technical debt and start from a clean
slate, AWS and other cloud providers, for the first time allow companies whose
focus is software, the ability to offload infrastructure to an organization
that can provide first class service at a manageable cost.

Other organizations will slowly follow suite but it will be the startups that
hone these systems as they are naturally the early adopters. I personally
would never consider owning my own infrastructure again, I just cant provide
the level of maturity that Amazon or others can at the price they do it at.

Bubble or no bubble AWS provides some clear cut business advantages. Ignoring
them does not prove that a bubble exists.

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gpjt
Hi there -- article author here. Not sure why what you say (which is correct
as far as it goes) makes the article wrong. All I said was that AWS is popular
among startups (with proof points), but buying Amazon stock is a poor way to
capitalise on that because AWS is a small part of their business.

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kls
I apologize if that was not the message that you where trying to convey and I
did get the latter point out of it, but I also got the inference out of the
article that because all these startups use AWS there is a bubble. It may not
have been your intent but it does seem to imply it.

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gpjt
Interesting, I don't get that even on rereading -- but yup, you're certainly
right that that would be a crazy thing to allege :-) I actually do think that
there is a bubble, but that's more to do with crazy valuations like the recent
Color.com investment than anything to do with AWS.

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kls
My interpretations are probably wrong more than they are right so take it with
a grain of salt. It just seemed to me to infer that. I think there is a bubble
as well, but this one is going to last a long time. The fact of the mater is
we have inflated everything else and popped it so now the only thing we can do
is re-inflate tech which has to stay inflated for some years to come until the
real estate and stock bubbles are forgotten then we can again shift into them.

~~~
gpjt
You may be right. People were talking about a bubble for several years back in
the late 90s before it finally burst in 2000, so there's no reason to assume
this one will be any faster.

That's actually why I was looking at investing in Amazon AWS; I don't have
enough money to invest in startups, but I was hoping that I could buy some
stock in something that would grow as startups do; the old metaphor of buying
the company that sells shovels to gold prospectors. That's why I was a bit
disappointed that AWS is such a small part of Amazon's service, because it
meant that I couldn't use them that way -- and because they're such a
massively dominant player in the hosting market, there seemed to be little
point in investing in (eg.) Rackspace instead.

Still, my investment track record is kind of spotty, so I may well be totally
wrong with that strategy anyway.

~~~
kls
If you want to invest in this bubble, commodities is where it is at, more
direct and they are the only other item left that had not been hyper inflated,
the trick as with all bubbles is to time your exit. Find a commodity, any
commodity that has not already hyper inflated and get it, it will inflate, the
commodities pop is going to be worse than any of the bubbles before them.

