this is why you're addicted to cloud computing

TL;DR

Amazon's retail business may not be profitable, but Amazon Web Services (AWS) is a highly addictive and profitable cloud computing service that dominates the market.

Transcript

you might find this hard to believe but amazon.com's retail business isn't very profitable selling consumers cheap Chinese junk is a highly competitive low margin business however Amazon Inc becomes profitable after you factor in Amazon web services an insane Cash Cow that recently hit operating margins of 30% renting out servers AKA cloud computin... Read More

Key Insights

• 😶‍🌫️ Amazon's retail business is not highly profitable, but AWS is a cash cow and the dominant player in the cloud computing market.
• 😒 Cloud providers use addictive tactics, such as free tiers and complex pricing models, to keep customers locked in.
• 😶‍🌫️ Egress fees for transferring data between clouds can be exorbitant, discouraging customers from switching.
• 😶‍🌫️ Proprietary technology and lack of standardization make it challenging to migrate infrastructure and services from one cloud to another.
• 😶‍🌫️ Google Cloud's removal of transfer fees when migrating away from their platform may motivate other clouds to do the same.
• 😶‍🌫️ Cloud providers resell AWS services at a higher price, offering a better developer experience but still remaining locked into AWS.
• 🤗 Using open-source technologies allows for portability and the possibility of a multicloud or hybrid cloud strategy.

Questions & Answers

Q: How does Amazon Web Services (AWS) make up for its unprofitable retail business?

AWS is a highly profitable cloud computing service, which offsets the lack of profitability in Amazon's retail business. It dominates the market with its advanced infrastructure and services.

Q: How do cloud providers like AWS lock in customers?

Cloud providers offer free tiers to get customers addicted, complex pricing models to make it difficult to determine cost implications of switching, long-term discounts and support for Enterprise customers, and high egress fees when migrating data to other clouds.

Q: Are there any alternatives to using cloud providers?

Yes, businesses have three main options: they can avoid using the cloud altogether and manage their own servers, use open-source technologies for portability across multiple clouds, or fully embrace a single cloud provider.

Q: Why do database companies force Big Data SAS companies into the cloud?

Many database companies offer cloud-based services, but the high cost of using their services outside a specific cloud restricts customers' choices. This forces Big Data SAS companies to rely on the cloud.

Summary & Key Takeaways

• Amazon's retail business is not very profitable, but its cloud computing service, Amazon Web Services (AWS), is extremely lucrative.

• Cloud providers, like AWS, use tactics such as offering free tiers, complex pricing models, long-term discounts, and charging high egress fees to keep customers locked in.

• Proprietary technology and the lack of standardization between different cloud providers make it difficult to switch from one cloud to another.