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Comment by streetcat1 | Hacker News Reader

The analogy in the article is wrong. Aws is not a marketplace and does not enjoy network effects.

I.e. if developer A uses AWS, this does not affect developer B.

What AWS enjoy is economy of scale (huge capex) which should help reduce price (but I am not sure that this is happening), and being first to market (Nobody got fired for choosing IBM).

Basically the main value prop today, as I see it, is saving the operation costs (human cost), by offloading them to amazon.

This will be solved by Kubernetes operators.

Moreover, most of the new computational intensive workload (E.g. IOT / AI ) is better done on the edge.

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There are more than one type of network effects. This one is called "Indirect network effect". What you have written is direct network effect.

As more developers start using AWS, there forms a large developer ecosystem around AWS tools and services, and therefore "developer B" will find it much easier and cheaper to use AWS, indirectly.

I don't think that indirect network effect is particularly strong in this case, though.

There are similar ecosystems around Azure and Google Cloud, and there are plenty of tools that support all 3 clouds equally.

I really don't think AWS is getting any kind of meaningful competitive advantage here these days. And if there's any at all, it's dwarfed by technical, financial, and strategic factors.

In BigCorp, which is ~half of all business, there is consistent pressure to standardize: cost, security, education, etc. There are all sorts of other levers too, like negotiated group deals -- at places like Netflix, AWS is effectively free, while any other vendor requires going through procurement. Competing with a negotiated loss leader - free - sucks. Azure benefits a LOT here due to other MS bundling.

I'm increasingly convinced all this means we are entering a telco-like monopoly era for Big Cloud software, starting at the infra layers and steadily moving up. I'd love a more savvy approach from Elizabeth Warren to be less 'break them up' to more 'these are the anti-competitive bundling violations.'

>there are plenty of tools that support all 3 clouds equally.

there are plenty of tools that support all 3 clouds, but most of those suffer from some sort of impedance mismatch and/or do not fully support the features which those clouds supply.

there are plenty of tools that support all 3 clouds equally.

“Equally badly”, you forgot ;-)

Cloud agnostic tools really mean “lowest common denominator” which means you end up paying premiums but not using the features. Just say no to Terraform!

So they will not find it much cheaper. AWS is priced that same regardless.

They might enjoy knowledge sharing, but at the speed that AWS evolves, the half-life of such knowledge is very short.

If I would bet on anything it would be Kubernetes. At least my knowledge is the same across clouds/on-prem. And there is no gatekeeper.

Except the technical complexity. I work with some very experienced k8s devops engineers these days and they screw up catastrophically every so often because of the million switches and buttons on k8s.

Right. Kubernetes is supposed to be managed by machines not by humans.

So how does a k8s engineer retire a node? This recently fooked up our cluster and it came down to a DNS issue... I don't see how that is "managed by a machine" am I missing something?

>Aws is not a marketplace and does not enjoy network effects. I.e. if developer A uses AWS, this does not affect developer B.

It damn well does. If everybody else is using AWS it pays to use it too, because:

* The IBM/CYA effect - i.e. "nobody got fired for picking AWS".

* The supply of experienced users - it's easier to hire AWS skills than GCP skills.

You're definitely correct. I tried to cover this in the post:

> There are obvious differences between Craigslist and AWS. The most important is that Craigslist (and each of the category spawn) is a marketplace, and so has the powerful advantage of network effects. Another distinction is that AWS has relative cost advantages over its unbundlers when it comes to the fundamental components of infrastructure (compute, bandwidth, storage, etc.), and I can’t see a parallel to Craigslist. So it’s not a perfect analogy, but the premise of unbundling certain categories still holds.

Scale effects are obviously at work in AWS. My premise is basically that higher-level things may be advantaged over AWS offerings because their scale advantages dissipate the farther away you are from their 'primitives.' I don't deny that there are some holes in the logic and comparison.

> Aws is not a marketplace and does not enjoy network effects.

I won't quibble over the definition of "marketplace" but it most certainly does enjoy network effects. AWS is the LAST place I ever look to host apps and software and yet I am almost always forced to use it because everyone I work with knows it. The result is that I use AWS even when I don't wan to use AWS because everyone else does.

I'm quite sure I am not alone in this.

But it does have network effects on several important dimensions. And if you think that k8s-as-a-service can replace AWS infra and reach, I'd like to understand how you think that is the case.

Don't forget economies of scope as well, where cross-product costs are decreased by a joint offering.

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