Amazon AWS: Giant dilemma in IT

Microsoft, Google, Apple. Now Amazon. Whenever IT company becomes a leader in its niche, people start grumbling about its “evil” intents or monopolizing the market. Well, it’s natural for a market (i.e. capitalist) model. Monopoly kills competition, but to become a monopolist you have to really work hard to reach it.

Same happened with Amazon recently.

Amazon is a retailer, price sensitivity is in their DNA. In the past, when new companies like Digital Ocean have gotten large enough to show up on their radar they’ve reacted with deep price cuts.

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Adding this all up, Amazon is terrifying to compete with.

 

 

2 thoughts on “Amazon AWS: Giant dilemma in IT”

  1. Competing with an established large company on the price alone has always been difficult, if not impossible. As a startup or a young company, you usually fight for every dollar, trying to make profit. Larger, more established companies, often have their cash flow figured out and they can afford deep price cuts.

    In order to compete, it’s often better to choose a vector different to price – quality, service, features, etc. These things usually degrade with larger companies, and they are much more difficult to fix than just lowering the price. Additionally, picking different vectors of competition usually means that you are no as “direct” of a competitor as if you were just competing on price. Which makes the whole competition from a large vendor not as aggressive.

    1. @leonid,

      > Larger, more established companies, often have their cash flow figured out and they can afford deep price cuts.

      It usually depends on their business models. Cutting down prices would be possible if they have big operational budgets (aka real money). Big companies mean large external investments involved, which is a part of financial obligations the board of directors should fulfil. So you’re still partially bond on the way you can compete.

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