By contrast, generally speaking, cloud providers are in an excellent position to use price discrimination to extract the entire surplus value of every transaction. And the flexibility and reliability provided by FedEx will to a significant extent simply be that of their computers.
(As chrisseaton pointed out, Boeing is in a cloudier position.)
Especially to the extent that special services are not leveraged, then there are cheaper alternatives. A lot of IT is just 'instances' not 'fancy cloud queues'.
AWS pricing is very transparent and people can make the decisions they want. Generally speaking, AWS does not price discriminate on the basis of 'business model' and their margins are meaningless with respect to the overall business efforts of a Big Co.
I mean - unless you are doing big AI crunching, or 'free hosting content' - then frankly the AWS bill is not going to be a huge line item relative to overall operating costs.
HNers need to get their heads around this: the economies of the could represent a fundamental, secular shift.
Imagine if Fedex designed and made their own delivery vehicles. Then they 'outsourced' that to Ford/GM. You might say 'look at Ford's amazing margins, look at the money being left on the table' - but in reality, it's still more cost effective to 'buy vehicles' the to 'DIY' them.
In the 'long run' those Azure/AWS margins will erode - and/or - the long tail will creep up on them. Basically data centers offering less, for less, and companies realizing they don't need the complexity of AWS do do basic things.
What that will look like is hard to say.
With hardware it meant 'pivot to Asia'.
Will this happen again? Chinese companies creating large data centres in the US with minimal staffing, monitored and operated out of China?
If we were not in a giant geostrategic kerfluffle with them, then yes, I would say that is the future. But given security issues etc. it's probably not.
Can India do that? Maybe.