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Comment by luhn | Hacker News Reader

AWS's pricing strategy changed a few years ago. Previously, they'd drop prices aggressively with much fanfare every time they did. Nowadays, they almost never drop prices, but release new offerings they say will save money [for certain use cases]:

- Gravitron 2 is slightly cheaper than Intel instances, with a greater price/performance ratio—at least for some applications.

- m6i is same price as m5, but new generation of CPU and increased network performance.

- gp3 is 20% cheaper than gp2 and has better baseline performance. It can also scale performance independently of size, so no more overprovisioning storage to hit a certain IOPS.

- S3 has IA, Glacier, Glacier Deep Archive, all offering cheaper storage but more expensive retrieval.

Not defending AWS here, just noting that they don't seem to be interested in direct price reductions anymore.

(EDIT: Previously I stated gp3 and gp2 were the same price. Thanks zerocrates and maxxam for the correction.)

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This is how every market player is incentivized to behave, apart from regulatory authorities acting to prosecute monopolistic behavior.

1. Price and compete aggressively to grow market share, put competitors out of business, and even transform the market, if possible

2. Once you become the dominant player (i.e. a monopoly), raise prices (or don't lower them) as much as possible without damaging your market position

This is why it's so important, especially in the US, for government to begin aggressively enforcing antitrust law again -- something we've failed to do against companies founded since the 1980s.

Those laws are there for a reason - not just as a weapon against "evil" (though Standard Oil was admittedly pretty bad) but to keep the market healthy and growing. There are so many positive second- and third-order effects that occur only when competition is healthy and well-regulated, and when prices are transparent.

There have been 9 antitrust lawsuits filed against big tech in the past two years, what are you suggesting should there be more of?

How much have they had to pay in penalties, and how many significant structural changes have there been? That's the standard to use, not number of lawsuits or even number of verdicts.

Antitrust penalties, more often than not, aren't even as big as the extra profit a company made!

Acting on splitting up the monopolies. Making Amazon/Google/Meta into multiple smaller companies. As antitrust fines have now just become the exepences one pay to run a monopoly now.

There should be results. Tech giants are too big to fail, as are the big banks and insurers. If we break up the banks and insurers by product offerings, then why not break up big tech?

Each company gets split into 3 smaller firms, each with access to all the IP of the mothership. They get to fight for their customers, and barter over business assets, to figure out who owns what.

I find it so highly ironic that anyone truly believes this would end up better.

They would not fight over customers, in the same way the breakup of AT&T did not result in a fight over customers - only a more complete, nimble, and effective domination of the entire US that lasts to this day.

These companies are hamstrung by their size and internal cultural infighting - you will break them into much more effective units than they can culturally achieve themselves.

The typical trotted out example of Microsoft is an aberration - Microsoft did not believe anything bad would ever happen, was horribly defiant, and refused to prepare. It still bounced back anyway, to a point of serious domination again.

Meanwhile, all of these current tech companies are prepared for this eventuality, as AT&T did.

I'm unconvinced that breaking them up is a good thing or not.

But for me the biggest "for" argument isn't that the broken up companies will compete with each other (that makes no sense because you'd break them up along business lines where they don't compete anyway).

Instead for me it is that it removes cross subsidies both financial (as in "we can give away this loss making application because we make so much money from X) and marketing (our new product Y is inferior to the existing product Z but we can make Y the default in our other apps and then people will just use it).

This removal of cross subsidies does increase competition.

However it's possible to force the removal of cross subsidies by other means (eg, the old "force the user to be able to select the search engine in Internet Explorer" regulation etc).

Yeah, you could kind of see this when Google started making Maps pay its own way, and started charging seriously for Maps API access - suddenly a host of decent alternatives sprang up, because they stopped sucking all of the oxygen out of the market.

It’s interesting - those financial cross-subsidies could lead to a situation where the sum(consumer_value_from_free_product) > total_consumer_harm.

Yes that's the common argument, and there's often a good chance it is better. Hard to make a generic policy when details matter a lot

Great point and a very underacknowledged aspect of governing.

> This is why it's so important, especially in the US, for government to begin aggressively enforcing antitrust law again

It already does and it didn’t particularly stop. The problem is that there is no obvious damage to consumers here (what US antitrust law is based on).

GCP and Azure are both significant players with similar offerings. The fact that people use proprietary Amazon APIs to manage stuff isn’t a high enough bar to show a monopoly.

“We are locked into their product because it’s a big engineering expense to move off” isn’t an argument for monopoly busting. It’s a reflection on poor business decisions by the complainer. It has never worked against Oracle/MS in the past, it won’t start now.

A whole generation of engineers is about to relearn the importance of open source that drove everyone to open source stacks 15 years ago.

> A whole generation of engineers is about to relearn the importance of open source

it's not really about open-source, but about inter-operability and open protocols.

Imagine if AOL internet was the defacto standard, and every website is their own walled garden? Oh wait, no we already have that - it's the mobile app ecosystem!

The reason the web is so successful (but not monopolistic) is that the http protocol is open, and the HTML standards are open (at least, until google started meddling now since they are almost a browser monopoly...)

So laws for anti-trust should now take that into account - platform monopolies can be beaten by forcing interoperability via legislation.

To the software wide of the equation --> open source is NOT the answer, abstractions ARE. The problem with programmers TODAY is that they take technical article written by a a cloud provider as gospel, and start slathering large layers of priority api calls/technical debt all over their solution - because thats what example code is designed todo, LOCK YOU IN. No need for contract nasties when your devs are doing the work for them!

Use an eggshell architecture, put your dependencies on the edge. global dependencies are the enermy.

For IAC, thats a slightly different story.

It's hard lock-in rather than antitrust. I don't know what should be done.

I suspect we'll arrive at a place as a society where regulators closely monitor use of protocols and require companies to fully support open protocols and network APIs.

Note: ex-AWS employee

The problem with the above narrative in this case (which I agree is generally true), is that's not what AWS did. If you look at the announcement history shared in a sibling comment you'll see that so much of it happened long before the cloud wars really heated up. I find that particularly curious. Is that because margins used to be very very fat and AWS just trimmed them down as economies of scale allowed in an attempt to (unsuccessfully) stave off competition? Is it just coincidence that the system found a natural level of margin efficiency right around when competitive pressures started to ramp up? Something else?

I have zero insight on why it has played out this way. I'd love to know though.

Seems likely that the competitors they were trying to dig into were on-prem/leased machine incumbents more than the nascent cloud competitors, though? Trying to build the brand of "Cloud" as an alternative, to the point where now it's practically the default choice for big enterprise/government customers. They combined that with extremely aggressive credit packages to get startups while they were young, so they would adopt the various services rather than building out their own infra on bare metal and saving a bundle long term.

Though making it harder for cloud competitors was certainly good for them as well.

It's like with any startup, your biggest competitor is what people do currently, not necessarily another company, let alone another startup. For many software startups, the biggest competitor is something like pen and paper, excel, standard email, etc.

Again I want to be clear that I have zero special insight on this based on my previous employment...

I was at a startup that was an early and very large user of AWS. The alternatives for us at the time would have been companies like Rackspace and other innovative (at the time) colo type providers. AWS wasn't super competitive one a $/compute basis at that point, and the credits didn't last very long, but it was wwwaaayyyyy more flexible. Add in the incredible convenience of S3 relative to most other alternatives at the time and it was an easy, though not obviously cheap, option.

The common narrative I hear though is it was the startup focus that won it for AWS. Everyone else was chasing the on-prem and enterprise market as you said. AWS went have startups, dangled some modest credits to make it happen, and they stuck around. The conventional wisdom was this is a terrible mistake. Enterprises pay the bills, startups go bust in an economic downturn (and we're coming out of a cycle at this point so companies are understandably nervous). Except those startups that AWS attracted turned into Netflix, Airbnb, Uber, Lyft, etc. and whole host of voracious consumers of infrastructure. The startups had become the enterprises. The competitors were _still_ trying to convince enterprises that cloud was safe enough to adopt. They belatedly realized they'd played the wrong game, tempted some of the not-so-startup-anymore companies across with more competitive pricing commitments, and finally the battle began. By this stage AWS had won most of the viable early adopters and used that as the beachhead to grow into the big enterprise and gov areas.

At least that's the narrative I've been told a few times over the years, and it seems plausible and maps onto my own experience. Though all of that experience has been startups and not enterprise/gov so it's a very skewed perspective.

But AWS invented IaaS, started at 100% market share, lost market share for years, and is now below 40%. Egress pricing is anti-competitive but that's a different narrative.

Market share is alone isn't a valid metric IMO, especially in cloud where the industry still grows at breaking neck pace.

In fact invite other players to join you to heat up the capital market might be a beneficial deal, as it indicates interests.

I seemed to remember gp3 being (incrementally) cheaper than gp2... yeah, gp3 is 8 cents per GB-month vs 10 for gp2 in us-east-1. That's actually a reasonably significant price difference, now that I look at it.

There were use cases with gp2 where one would over provision capacity to get IOPS. gp3 let you just dial up IOPS which was much cheaper than over provisioning. This may seem a corner case, but it was moderately common. Also AWS should cut their prices, well in this environment maybe holding them is a cut....

It’s noteworthy to me that available memory has not increased in some time. You can find machines with more memory, and perhaps the number of classes has increased, but outside of very narrow envelopes it might be cheaper to have 2 m6i’s with undersubscribed CPUs than to try to increase the amount of cpu per core on something else.

see the u6tb-1 and x2i machines

I don’t know what data center u6tb-1 is in but it’s not in the ones I use.

X2i is interesting, but may overshoot the mark for the service I’m thinking of, but might be appropriate for another. I may have to try again as to whether I can make the r6i math work.

This is mostly due to DRAM stagnation and Intel/AMD staying at 8 channels for a while. Memory capacity should increase with Genoa.

gp3 are 20% cheaper than gp2 per GB

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