Cloud

AWS isn't the cheapskate's cloud, and Amazon doesn't care

AWS isn't winning because it's cheapest. It's winning because of innovation.

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Image: CNET

In case you're wondering, AWS likely isn't your cheapest public cloud option. That honor goes to Google in most scenarios, as ZDNet's Larry Dignan has spotlighted. But also in case you're wondering, it doesn't matter.

"Cheap!" isn't a winning strategy

Oh, sure. No one wants to get gouged on pricing. Everyone wants a deal. But cost isn't the primary driver of public cloud computing adoption. It never has been.

Instead, enterprises have flocked to the public cloud, and to AWS in particular, because it unshackles them from the rigid constraints of data center investments. In short, because it's convenient and affords dramatic improvements in business agility.

Google originally focused on price. It didn't work. With few exceptions, as Seth Godin explained, "Low price is the refuge for the marketer who doesn't have anything more meaningful to offer," and the developers who have carried their enterprises into Amazon's cloud haven't done so to pinch pennies. So over the past year it has pursued a strategy of opening up access to the riches of its internal tech (like Spanner), which has borne more fruit.

SEE: Cloud compute pricing bakeoff: Google vs. AWS vs. Microsoft Azure (ZDNet)

And yet RightScale wants us to focus on price and calls out that most of the time, AWS won't be the low-cost price leader. Even taking this and other RightScale data into account, Dignan correctly concluded, "AWS won't be the cheapest alternative in many scenarios. Then again—AWS has a bigger menu, more advanced cloud services, and the customer base where it doesn't have to go crazy on pricing. AWS just has to be fair."

Innovation isn't free

Fair and... innovative. AWS has introduced new functionality at an ever-increasing pace, a pace that Workday CEO Aneel Bhusri has described as "stunning." But that's somewhat secondary to the real AWS innovation that matters: what it does to the businesses that use it.

As Adrian Cockroft (former cloud architect at Netflix, now at AWS) has noted, "There is an existential threat... that if you're doing quarterly releases and your competitor is doing daily releases and continuous delivery, you're going to fall so far behind in the user experience that you're going to suffer." While Cockroft was not discussing AWS or the cloud, specifically, it's precisely the freedom from infrastructure that makes it possible to follow his flexible development mantra.

SEE: Amazon still crushing cloud competition, says Gartner Magic Quadrant for IaaS (TechRepublic)

AWS product strategy chief Matt Wood helped elaborate on why this is so in an interview with TechRepublic:

Those that go out and buy expensive infrastructure find that the problem scope and domain shift really quickly. By the time they get around to answering the original question, the business has moved on. You need an environment that is flexible and allows you to quickly respond to changing big data requirements. Your resource mix is continually evolving—if you buy infrastructure, it's almost immediately irrelevant to your business because it's frozen in time. It's solving a problem you may not have or care about any more.

Of course, part of that cloudy business agility isn't baked into AWS itself but rather derives from its expansive partner network. As McDonalds declared from the AWS re:Invent main stage this week, one of the things that facilitated the quick serve restaurant giant moving to the cloud is that all its partners are happy to work on AWS.

All of which means that AWS can keep relentlessly lowering prices without ever bothering to be the cheapest public cloud. It simply needs to offer more innovation and a broader partner ecosystem to win... and charge a premium in the process.

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About Matt Asay

Matt Asay is a veteran technology columnist who has written for CNET, ReadWrite, and other tech media. Asay has also held a variety of executive roles with leading mobile and big data software companies.

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