Amazon, AWS, Zeitz discussed on Software Engineering Daily
Some questions about other markets. There are a number of second layer cloud providers. So I've talked to some companies recently like spot in st- or Zeitz or horr- Oku. How do the margin profiles of second layer clouds compare to those of base-level clouds like AWS, I do think that you're asking the right medication? And the right meta question is is this a winner take all market like his era enough scale level moat is enough of a scale level moat because you have his ability because you've got the economies of scale that you end up becoming the next generation telcos. So what pretty much any economist will tell you is that if you have an economic system or the incremental cost of adding another user converges on zero this is absolutely the case with telcos, right? Then you'll end up in a monopoly situation. That's just basic economics has nothing to technology right at the incremental cost of. Adding that additional user convergence on zero you tend to have monopoly situations. And then the question is is that the case for for these large clouds now, it seems to be that clouds can actually differentiate by the way that services a commodity service. Right. And that's something that anybody can offer that service. It seems like the the clouds can differentiate an ad value. I mean, the workloads at run on Azure, acts you tend to be quite different than those that run on Amazon or digitalization if so we're we're investors in digital ocean. Also tends to be much more developer focus different types of workloads. And so I think actually you may end up in a situation where you can maintain margins through differentiation and through fragmentation of the not the customer base, but the use case base. It was interesting. We used to sell them the multi cloud environments all the time, but multi cloud didn't mean the same workload went between clouds, which I think is one of the biggest misunderstandings on the planet. Right. And like just because someone is multi cloud doesn't mean that they can actually arbitrate clouds. It just means that they use multiple clouds for use case that's best suited. And if if you maintain that, I mean, this is this trillion dollar markets all of IT. Going after. Yeah. Then you can think that actually there will be a fragmentation they'll be differentiation. If that's the case you will be able to maintain margin. But it's early to say that for fact, you could also go back to the taco gays and sitting actually everybody's gonna offer the same thing. The incremental cost betting users going to converge on zero there for the largest one will win. And right now that looks like that would be as on. Why hasn't there been a company that does this arbitrage between different cloud providers? Will so many have tried. Yeah. I've been very close to a number that have tried. And here's my view, my view is because it's not really solving customer pain point. And if that's your primary value. I don't think you can build a successful company. Now is the secondary value. It's great. But I don't think you can sell on that alone. So how do you save money on Amazon the best.