What is stopping AWS from raising prices?

Question

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

thdxr · Accepted Answer

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

jqpabc123 · Answer

There are other providers that people can move to.

aq9 · Answer

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 · Answer

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.

ActorNightly · Answer

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.

belter · Answer

Dont wake a sleeping dog...let's keep like this: https://aws.amazon.com/pt/blogs/aws/category/price-reduction...

JoeyBananas · Answer

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.

PaulHoule · Answer

Azure. It's not too bad.

thayne · Answer

I suspect doing so would probably draw some major anti-trust scrutiny.

eimrine · Answer

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.

KomoD · Answer

Nothing, and they already are