I'd say take a little time out, read The Discipline of Market Leaders, Mastering The Complex Sale, and Differentiate or Die and think about ways you can compete with them. IF your analyzes leaves you with the conclusion that the best thing to do is to drop your idea, then fine. But don't just randomly decide to drop it because AWS is going to be competing with you.
Also, just a random thought that I recently had, given that I'm in the exact same boat (trying to compete with stuff AWS is doing).. read up on the old "Embrace and Extend" idea. I think there may be a kernel of something there, in terms of using that to compete against larger players. It's a half-formed / half-baked thought right now, but it might be worth chewing on a bit.
If you're interested in continuing this discussion outside of HN, feel free to drop me an email. prhodes@fogbeam.com
- Amazing customer support
- Price undercutting (at a loss) for your first N customers
- Free "softs" like monitoring, load-balancing, etc.
- Make it a managed service for your first N customers
- Urgently implement features requested by your first N customersAmazon is known to sell at loss in order to drive adoption or even hurt competitors. There is so much you can sell at loss, but Amazon can beat the crap out of it and sell much more at much higher losses and still be profitable in the aftermath.
I'd say, starting a price war against amazon is quite a dumb idea, if you are a lot smaller player.