Aws

We all know that AWS is expensive. But it used to be that it was by far the best hyperscaler and had the appeal of being novel. AWS profits reflected that. Now that it’s been around a while, the bloom has come off the rose. There are now solid competitors (especially Microsoft Azure and Google Cloud) and enterprises are starting to move their infrastructure back to their own data centers.

37Signals has a large AWS bill. About $3.2M USD last year. It sounds like they have been proactive at managing the bill and that’s just what it costs to run their business on AWS. They are an interesting and smart company and it seems they are going to try to move some/most of that out of AWS. Dell will be happy to hear that but I don’t know if it will result in significant savings because you now have to hire and manage people to run the show robustly (especially the 8PB of storage).

This is a good analysis by Matt Rickard on why the incumbent large cloud providers (AWS, Azure, GCP) will not follow the telcos to become “dumb pipes” for compute and storage. He presents a number of arguments why the hyperscalers will continue to provide high value services. The most compelling one is that the incentives are aligned between open source and the hyperscalers. These companies can capture much of the value of open source by value added offerings.