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Comment by bko | Hacker News Reader

It certainly has the potential to be a huge market. What barriers prevent others from entering?

Software? Does Amazon have have a monopoly on strong technical workers or patents? Not sure about the ladder, but certainly not the former.

Capital? Cloud hosting is probably capital intensive but there is plenty of interested parties with capital.

Legislation? Probably a lot lower barrier to entry than other industries, although I'm not sure.

It could just be that they are executing better than the others.

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I think you severely underestimate what it means to run a public cloud business. "Probably capital intensive" betrays the naiveté of this comment.

Even if you have 100 billion dollars in the bank, you're years behind. Go buy land, build datacenters (5 year lead time), sign power contracts with utility providers, figure out where to buy all your dram and disk and networking and shit and oh develop your cloud services too. Now keep them running.

Even apart from the large infrastructure cost for a geographically distributed and reliable network, a lot of the value of AWS/GC/Azure comes from the many built in services that completely change the ops workload.

Building out those services is a monumental task requiring loads of experts in their respective fields (databases, storage, networking, etc). I see this as at least as much of a hurdle as the capital expenditure.

Underrated comment.

To add on to your point: Amazon told Jassy in 2003/2004 to take 55 engineers and build out some cloud services they could sell to customers. ~6 years later, Microsoft decides to enter the market.

That is an epic first-to-market timeline.

Agreed. Ask RAX how hard it is to compete in commodity cloud infrastructure.

I’m a RAX public cloud customer with a 6 figure bill every year and they are actively trying to get me to switch to AWS.

Oracle, with OCI, is working to crack the market. It has the kind of capital to be able to do it, but it's just insanely expensive. We're running out of companies that can possibly fund such work.

Not only do you have to have the physical infrastructure to launch a region (expensive in and of itself), you pretty much have to have the infrastructure to launch at the minimum two regions geographically separated in some form. Plus with data locality laws increasingly enter the mix (something that AWS never had to worry about until they were already a success), you increasingly have to build regions everywhere or customers can't use you. Frankfurt, for example, is a virtual given.

That's before you even start to consider all the engineering work involved writing the code to run the cloud services.

Just launch a bunch of super-tiny, 1-AD regions so that you can have it on the map, and then rush to do region expansion within months of region launch. ;-)

You would probably start by co-locating in multiple data centers, if you rent large amounts of space you can get quite decent deals. You'd have to do this with the best DCs you could find, however.

Once you had enough demand to merit your own data centers, then would go ahead and build them. Thats what most VPSs do.

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