And in Amazon Web Services, the biggest thing Amazon has to fear is the OpenStack initiative producing a platform that lots of little hosts can host.
At the same time, Amazon is stock market time bomb that will either start extracting monopoly rents and draw regulatory ire, or whose stock will drop, because of the amount of revenue multiples.
That said ... this is the way it nearly always works. Microsoft invented .NET over 10 years ago, and has kept it proprietary, leveraging the dominance of Windows, extracting rents. Now that Mobile is the new hotness and Microsoft needs to catch up, it goes open source. Google released Android for the same reason.
In short ... the companies that devote a lot of resources to R&D usually like to recoup the costs, but eventually PLATFORMS get opened. Frankly, the world benefits more when this happens sooner (Netscape open sources its codebase, the Web is designed, etc.) but the engine of progress in capitalism is still speculative investment, and that needs to pay off for years before the public at large can benefit, if investors are to continue investing.
Once we switch to crowdfunding, however, this model of capitalism and risktaking may be disrupted as well.
I highly doubt OpenStack alone can make it possible for smaller players to replicate AWS's economics of scale, or even come particularly close. From what I understand Amazon doesn't just plop their software on commodity hardware, they use highly specialized gear optimized for running specific services. And that's not to mention buying power, the ability to run on razor-thin margins and other business factors that impact pricing.
It's commodity in the sense that Amazon buys it from commodity vendors, but they use custom designs built to address the specific parameters of their data centers. Very few other companies can afford to employ an army of engineers to tweak every last component for optimal price-performance, nor for that matter do they have the benefit of accounting for a noticeable share of a supplier's revenue when entering the negotiations room.
> Smaller companies can and do offer much better pricing, they just don't have the marketing budget to convince you of it.
I am aware of at least one player (DigitalOcean) offering lower pricing than AWS, but that's only in a fairly limited niche. So while they may have the "economies" part checked they don't have the scale and scope to compete with Amazon on a particularly substantial level. I'd also be curious how they match up to Amazon in terms of operational efficiency since they lack many of the the advantages I listed here and in my previous post, which give AWS an edge in the race to zero as time passes.
So when the moment comes and you want to move away from AWS and you have scaled well beyond the capacity of a single box, what then? Suddenly you have to figure out sharding, replication and HA setups from scratch. While that may be the right choice for you if you're an early stage startup and it lets you defer engineering costs until a point where you're hopefully better funded, it's also dangerous:
It's far easier to get things like sharding and caching and use of read-replicas and multi-master replication right if you think about it from the beginning (if you've ever tried to retrofit any of this onto an application not designed with it in mind you know what I'm am talking about). It'd be awesome not to have to worry about this, but if you don't, you tie yourself into a platform you'll find it harder and harder to move off.
As a product, this solution would be a killer - it sounds fantastic. As an AWS-only service, I for one will treat it as if it doesn't exist, because getting tied to AWS for the long term is not an option for most of the projects I do.
"Baseline storage performance is rapid, reliable and predictable—it scales linearly as you store more data, and allows you to burst to higher rates on occasion."
You mean to say that I can scale my single MySQL instance linearly with data storage by just throwing bigger SSDs at it? That has not been my experience, please share how you have been able to accomplish this?
They've even mentioned it's pretty much a click-through to migrate from mysql... to me that seems like the opposite of lock-in.
As to only being able to use their infrastructure to scale this way, that's a value-add.. that's part of why you pay for SaaS instead of developing your own infrastructure. This is why you're renting instead of buying.