- EC2/AWS may be the de facto standard but it's not an actual standard the way SQL/HTTP/DNS are so I don't think the comparison is totally accurate. I think there's plenty of room to supplant AWS by offering a better system.
- There's plenty of room to compete with Amazon. Despite what you might think their prices are actually pretty high with plenty of room for even small hosts to undercut them. There's a reason that it's been so successful for Amazon; they are making a mint on it.
The big problem for smaller hosts wanting to compete with Amazon is that there's currently no ready made cloud solution that's 100% end user ready. Every single solution on the market requires some amount of custom coding in order to bring it up to end user quality. Which is frustrating.
But x86 HVM, Ethernet, IPv4, IPv6, NFS, SCSI, etc. are also standards... that EC2 doesn't support (fully). There is room in the market for standards-based IaaS IMO.
In the EC2/OpenStack model, you cannot have customers spool up VMs with arbitrary specs; they must choose from available flavors.
Are you talking about sizes? If you allow arbitrary sizes or CPU:RAM ratios you'll get fragmentation which you have to recoup by charging higher prices. If VMs are 1/2^Nth of a server, you can use a buddy allocator.
I realize it creates fragmentation, but it's one of the key features customers want -- and should be able to get -- out of a cloud system. And other platforms provide it.
I work for a small to medium sized web hosting company and we looked into using OpenStack as a solution for offering a Cloud product, and the problem is that OpenStack is very much in a dough-like state. It's great if you want to bake your own solution. But if what you need is bread to build a sandwich on, you're going to be starting a lot further back in the proces than you maybe want to.
I also fundamentally disagree with the whole direction of playing chase with Amazon. Linux didn't supplant Windows by copying it; it supplanted Windows by offering something that was better. If Linux had merely been free and Windows compatible, I don't think it would be the success it is today. It was not just free and open, but also technically superior.
I think OpenStack had -- and may still have -- an opportunity to provide a much better platform than what Amazon has. EC2 has a lot of design flaws and faults which result not from technical limitation but just bad design choices, and there's no need for OpenStack to follow in them.
The biggest of them in my mind is the flavor issue. In the EC2/OpenStack model, you cannot have customers spool up VMs with arbitrary specs; they must choose from available flavors. So that means if you want to offer a wide variety of options, you have to have many, many flavors on option. Which then leads to the customer having to pick one of them -- or to obfuscate this issue behind an interface which can match up the user's choices with the appropriate flavor. Neither of which is a good solution.
There's no reason a cloud VM platform should have this kind of restriction. Other competing platforms don't. I think OpenStack will eventually be supplanted by something much better. It's just that this is a very new industry, much more like competing computing platforms in the 1970's than the much more mature battle that happened in the 1990's. Where even though Linux was new, it was based on 25+ years of prior work and experience.