* Price things in an intricate way sufficiently specific to actual costs of providing the service for many use cases
* Price things more generally in a way that more or less probably results in about the same revenue
The problem with option #2 is that it's dependent upon some customers implicitly subsidizing others (e.g. any "unlimited storage" backup solution). It can work a lot of times, but sometimes it doesn't, and at AWS's scale, that could change quickly. It'll upset a lot of customers if they then have to restructure pricing to account for a small subset of customers' use cases being too costly to provide.
Prices should have gone down because they've continued to scale up and go into custom cooling/hardware/backbones/etc.
You're basically saying that you're cutting them slack because their margins have gotten much larger and they haven't decided to raise prices to make them even bigger.
Why should that make prices go down? Prices aren't based on cost. They're based on what the market will bear, i.e., what customers will pay. If you think AWS is too costly, you can go find some other solution. If enough customers start doing that that AWS's financial state suffers, AWS will have to rethink its price and cost structure.
Competition in general tends to drive prices down, yes; but competition was not what the post I was responding to claimed "should" make prices go down. That post was claiming prices should go down simply because AWS is investing more resources in building capital as they scale up. That is not true.
> The fact their prices and profits have remained high for so long indicates lower competition, likely due to high barriers to entry from competitors and high switching costs for consumers.
It could, but it could also indicate that this market simply has not reached equilibrium yet. I don't think it's plausible to claim that AWS has no competition in this area, or that barriers to entry are high; there are a number of huge corporations investing a lot in this market, and plenty of smaller players gaining customers by presenting a simpler interface to an AWS back end (e.g., Heroku). Switching costs might be high, not just for AWS but for any provider in this market, simply because there is so little standardization in how infrastructure is specified and controlled. That would lengthen the time to reach a competitive equilibrium in this market.
It is worth remembering that for new technology markets, it can take a long time for a competitive equilibrium to be established. A good example is the automobile market; in the US, for example, it took many decades for car prices to be driven down to marginal cost and for all of the various market players to search out and capitalize on all the possible competitive efficiencies and strategies. Part of that was also that it took decades for the auto market in the US to become saturated, i.e., for most new car sales to be replacing old cars instead of getting a car to someone who had never owned a car before. I don't think the market for AWS-like services is anywhere close to saturated, which means we should not expect a competitive equilibrium; instead, we should expect exactly what we see, large market players trying to capture as much market share as possible during the growth period, just as major automakers did in the US during the growth period in the mid-20th century. Capturing market share in a growth period is a very different game from squeezing out efficiencies in a market near competitive equilibrium.
My point is that their prices could have gone down without them even feeling any pain because their costs have gone down. They don't deserve slack for keeping prices the same. Keeping prices the same just means their competitors either suck or they sit in an oligopoly together.
The slack I'm giving is for the complexity in their billing, not in the price itself.
You always need the head to subsidize the tail (e.g. free trials). You can’t let the head become unprofitable.
And they can also impose things like bandwidth caps to curb some less-profitable customers' usage. But cloud providers, by design, are charging "per use" and expected to scale "indefinitely"... at least for expected use cases.
If you feel like you're way overpaying for AWS, you're much likelier to look out for alternatives. So if they help their biggest accounts save some money, it'll net them way more in the long run.
It's part PR, part long term customer acquisition
I frequent a local family-owned Italian restaurant/pizza place and my usual order jalapeños, banana peppers, and roasted garlic so I do a build you own. Totally fine, happy to pay the price. But one day I come in and the woman working the take-out counter sees my order before it goes in and tells me that if I order a "meat lovers", remove two toppings and sub the rest it comes out way cheaper.
So now I'm the vegetarian that always gets a meat lovers and she makes the joke every time I come in.
I don't think it's weird or nefarious that a business doesn't have completely consistent pricing and holding it differently can save you money. When we spec out services on AWS we're using the official calculator when deciding whether it's "worth it" so to us at least it genuinely feels like we're saving money.
I've seen that before, and I've also seen the opposite where people buy the veggie pizza and then add a meat or two on top to get a cheaper supreme pizza.
We had originally gone in with clever ways for owners to describe how different changes would affect the price of an item, but ended up landing on just a giant matrix where they could input the end result price for any combination. The owners couldn't articulate their own pricing well enough to model it well.
AWS you can poke around and figure it out, Azure is a Kafkaesque nightmare of infinitely confusing UI/UX, a permission system that is like trying to hit a moving target in a dark room, being moved by someone that hates you, doing anything seems needlessly complex, and trying to replicate/test anything locally is horrible (looking at you Azure functions).
I'm trapped in this mess because the nature of our Client is that they'd consider anything besides Azure as a slap in the face, but it's been absolutely the most miserable task I've taken on in years.
As a bonus I'm getting side-eyed by teammates who have a naive faith in The Cloud and can't comprehend why this is taking so long and why I can't just give them a cost estimate.
Honestly, I wouldn’t touch something from Oracle with a 10 foot pole, sorry. I’m sure the UX is probably pretty good, but I’m staying away from that company if I can avoid it-too many horror stories, way too “enterprise”.
Take this with as much salt as you want but they're really trying to put that in the past. OCI pricing is super transparent, simple metrics, cheaper than the incumbents on every front, there's no "call us for pricing", there's a transparent 30% discount for committed spending (before you even get to talk to a salesperson) and the dev team has been given free reign to act like a startup and ignore the corporate machine. I'm not a marketing person but I do believe we have a very good offering and it's a shame it's being ignored solely because of bad blood.
[1] https://www.oracle.com/cloud/economics/
[2] https://www.oracle.com/webfolder/workload-estimator/index.ht...
You have a company that charges licenses based on the physical core count even if you run the product in a VM using only a single core, but then they also want to be your cloud supplier.
The only strong point of Oracle is legacy product lock in, you would be crazy to pick them for any new initiatives.
I wish there were SaaS products that would effortlessly audit enterprise SaaS bills with support for more than just the top 1% SaaS products.
I have a ticket open with MS support. I suppose it's to their credit that they're listening to me but it's been a few weeks with only the aforementioned hand-waving. I started just sending them screenshots showing that their own dashboard showed no usage during the times I'd gotten charged.
It isn't simple at all! Not only is it complex and fairly daunting, you also need pretty deep knowledge of AWS to fill it out correctly. They eventually introduced an improved calculator that dropped the "simple" branding: https://calculator.aws/
Well, there are whole organizations in my company dedicated to installation, procurement, provisioning, ordering(and tracking of said orders), of datacenter resources and hardware.
We are spoiled.
The fact that there are consultants who specialize in figuring out AWS billing was, in retrospect, a warning sign.