Last week Amazon Web Services announced that they are lowering their support costs and also introducing a free plan.
The AWS Support program just got even better! We have added features, lowered prices, and created a new free support plan that includes immediate access to customer service and technical support for AWS issues, 24 hours a day, 7 days a week, 365 days a year.
Last week, I had a brief twitter discussion with few folks on who can disrupt Amazon, especially considering the rapid pace in which they are innovating in the infrastructure space. I thought I will do a quick post and write down my thoughts.
First on the pricing front
Amazon has quite a bit of leverage on the pricing and they can go further down to expand their market reach. If we look at Amazon’s retail strategy, they will even take a loss to gain market power. Under such circumstances, no other competitor can hit them on the pricing front and win the war. If you noticed the history of AWS’ pricing reduction, you can easily notice that they sense competition much faster and preemptively lower the prices to outsmart the competition. The current reduction in support prices fits the same story line.
Even though there is no single player in the IaaS space who could compete effectively with AWS right now, I think this move by Amazon can be seen as a reaction to growing popularity of OpenStack project. Yes, OpenStack is too far behind to emerge as a direct threat to AWS but it has the potential to spawn (well, it is already spawning some) hundreds of smaller service providers whose main differentiation from Amazon will be on the support front. In fact, that is the premise of regional providers from the beginning. I have spoken to many SMBs and ISVs on why they are going to a different provider than Amazon and their response always is that I don’t want to be one of the forum members searching for possible solutions. In fact, an ISV in India went with IBM SmartCloud over AWS just for this reason. Right now Amazon appears to be winning the game even without a proper support system for their services but once OpenStack succeeds in lowering the barrier to entry and more and more smaller service providers get in, it could turn out to be a headache for Amazon. By lowering the prices and introducing a free support plan, Amazon is positioning themselves to fend off any threat from a federated ecosystem of cloud providers.
Who will disrupt AWS?
With Amazon innovating at a rapid pace and not giving room for the competitors to catch up, the natural question arises about who will emerge as a viable threat to Amazon in the market. AWS is several steps ahead of the competition on the innovation front and, at least, one step ahead on the pricing front. How can anyone disrupt a company who is in such an advantageous position?
Source : Cloud Ave