HN Explorer

Ask HN: What is stopping AWS from raising prices?

6 points by fgeahfeaha ↗ HN
A common silicon valley move is to acquire a ton of users with a low priced product, then slowly keep raising the price over time to increase profitability.

With so many companies deeply entrenched with AWS, what happens if they do this?

Its not like netflix where you can just cancel it if the price raises too much

16 comments

[ 12.2 ms ] story [ 1543 ms ] thread
jqpabc123
There are other providers that people can move to.
thayne
Only if you have been careful from the beginning to design your system in a platform agnostic way and don't rely on AWS specific services and APIs.
jqpabc123
I'm guessing the biggest such service is S3. Other providers offer compatible APIs.

The fastest way to convince developers to abandon or avoid services is to start price gouging.

thayne
S3 is probably one of the easiest to migrate. More problematic would be things like SQS, SNS, DynamoDB, SES, Lambda, etc. And that isn't even mentioning any control plane or infrastructure level code.
eimrine
Raising prices means a lot of hardware is doing nothing. Raising prices while some hardware shortages (flood on HDD factory, lack of top notch videocards) kind of works.
thdxr
nothing is literally stopping them besides a deep understanding of what it takes to make companies that can last a hundred years

amazon ruthlessly drives down costs because they know the moment they leave the door open too far, someone will eventually come in and supplant them

an example is how SQS has gotten 99% cheaper since it launched

bezos is the one who said "your margin is my opportunity"

they can one day turn around and start cranking up prices but this is how the last generation of companies (Oracle, IBM, etc) died

PaulHoule
Azure. It's not too bad.
GGO
It has never been better than too bad
vasili111
Could you please clarify why you think so?
thayne
I suspect doing so would probably draw some major anti-trust scrutiny.
aq9
What do you mean? Prices are going up. Costs have been falling since AWS was introduced faster than they have reduced prices. I am willing to bet that their gross margin is higher today than it was last year, 5 years ago or 10 years ago.
QuinnyPig
Remember as well that large customers have contracts that require certain notice periods before any price increase can take effect. Even the standard customer agreement requires 30 days' notice.

Assuming they did this (and I'm talking 'add a zero to their pricing,' not 'a 5% bump'), it'd juice their revenue for a couple of years and then it would plummet as folks migrated to more economical / trustworthy options.

JoeyBananas
At the scale that AWS operates, if they raise their prices 1% they lose some measurable percentage of their sales in response. It's not a given that raising the price raises the profits. I wouldn't be surprised if their pricing is already optimized.
ActorNightly
Most of AWS is "pointless" in the sense that all you need to be able to do is define VPCs and rent EC2 instances and deploy open source software on those instances to accomplish the same thing.

The cost that Amazon charges for all the extraneous services is priced exactly at the point where someone would rather pay those costs rather than pay developers to go implement them on EC2s.

KomoD
Nothing, and they already are