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points by shadowgovt 13 hours ago | 0 comments
It's not a moat because it's a commodity.

Enterprises actively do not want Cloud provider's services distinguished by anything other than speed, cost, and reliability, because features imply lock-in. They'd rather have someone else's computer as bare-metal and run features atop that.

That's a recipe for racing to the bottom in the cloud space against the other providers, where the wins are very raw: what hardware did you predict two years ago you needed today, what breakthroughs in information structuring have your competitors not yet implemented in their own clouds, etc.

It's raw capitalistic competition, and that's good for consumers... But companies don't want that because it's a path to net-neutral revenue in the long-term, which is not how you put your stock on the moon.

[–] whakim 8 hours ago
The history of the cloud computing market belies your argument, in that the entire market has grown significantly since 2020, with all 3 big cloud providers >3xing their operating income (and 3-5x'ing their revenue) over that period. That isn't what you'd expect from undifferentiated, interchangeable commodities.

The scenario you've described sure sounds like the enterprise ideal, but it probably isn't the reality: in fact, some combination of high switching costs, feature differentiation, and/or price insensitivity means you have 3 highly profitable businesses.

[–] motionlessveloc 10 hours ago
If your business is tech and compute is a major cost of business, then sure, you want to avoid lock in.

But if your business is not tech, it makes a hell of lot of sense to pay a few bucks extra for a managed service like Cloud SQL to host your databases and let Google handle the security patches and backups etc, instead of hiring your own DBA to do it for you.

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