Ben Thompson: belief

Transcript context

…Do you think that applies to AWS, too, or is that different? Realistically, the challenge for AWS is: (1) What's going to happen with the real dry up in startup formation and easy money in that space, a lot of which went to Amazon? They're the default choice for startups. (2) Microsoft's bread and butter has been, look, you've been working on us for a long time. We're going to package it. Suddenly, you're not just paying for on-premise windows. It also includes Azure credits, and we're going to be able to attribute that to our numbers, and now you can move pieces over, and we'll help you do it, which I think is exactly what they should do. It's been a very smart strategy. But I think that the issue in any market is it's like me. All the initial easy stuff is there are lots of low-hanging fruit, but then the largest part of the market is still the part of the market that's always been there and isn't necessarily fast moving. Microsoft has just really cleaned up in that market. We're the known entity. We can help you move over. I think from Amazon, building up the support capabilities and rationalizing their offerings, it's weird because Amazon benefits, because they have so many features. AWS is the Microsoft Word of cloud providers. They have an absolute absurd number of features, and the interface is pretty terrible. But every single customer is completely dependent on one of those features. And if that feature is not there, then they can't go away, and that actually ends up being their moat. We were researching the episode. We were talking to longtime AWS veterans to understand the mental framework, to talk about them today. It became very clear that AWS doesn't deprecate features. Amazon will kill stuff, kill the fire phone, kill local delivery for food. They'll kill all kinds of stuff. But in AWS land, if a customer depends on something, AWS’ long-term enterprise value is determined by customers believing that Amazon will continue to support them forever. They don't deprecate services, even when those services end up flipping upside down on the unit economics and they have to maintain a costly service that they never figured out how to optimize.…

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