Cloud Computing: AWS innovation is what’s driving adoption, not price

Grazed from TechRepublic. Author: Matt Asay.

Despite early marketing hype, public cloud computing has never been popular because it’s cheap. Ultimately, the real driver of public cloud computing services — like Amazon Web Services (AWS) — is convenience, but undergirding that convenience is profound, relentless innovation. While AWS has competition from Microsoft and Google now, no one yet has managed its ability to drive innovation at a frenetic pace.

Not so cheap after all?

Lately, AWS has come under attack from competitors like Google and Microsoft, who are willing to offer significant price discounts, and also from startups and others who believe that they can more cost efficiently run their own infrastructure. Leading this latter pack is investor Brad Feld, who argues:…

"Once a company hits $200k / month of spend on AWS, the discussion starts about building out your own infrastructure on bare metal in a data center. This ultimately is a cost of capital discussion and I’ve found massive cost of capital leverage to move away from AWS onto bare metal. When you fully load the costs at scale, I’ve seen gross margin moves of over 20 points (or 2000 basis points – say from 65% to 85%). It’s just nuts when you factor in the extremely low cost of capital for hardware today against a fully loaded cost model at scale."…

Read more from the source @ http://www.techrepublic.com/article/aws-innovation-is-whats-driving-adoption-not-price/