Ben Gilbert: belief

Transcript context

…How did that happen? There's something going on there. There are a couple of things. Moore's Law is in their favor of all their COGS getting materially cheaper over time. If I had to guess, I think they're not discounting for customers as fast as they're realizing both economies of scale. Legitimately just cost coming down from Moore's law. I think, actually, what's going on here is, it comes all the way full circle that Amazon is offering Platform as a Service offerings at this point and telling customers, hey, you could just keep using our primitive building blocks, but actually, what you should be doing to take advantage of the full power of the cloud, to run these Lambda functions, or to take advantage of these proprietary databases that are way faster, is to pay us a little bit more margin and take advantage of cloud native things. It's like, ah, the old tricks or the new tricks. Now you're the incumbent and you're finding way to do margin expansion. The mindset a decade ago or almost two decades ago at this point of, oh, we need to create the platform of the future was right, but you needed to do Infrastructure as a Service as a stepping stone to get there. It turns out that Amazon did that and generated their 18% operating margins. Now, here they are in a more of a Platform as a Service world with customer lock in generating 30% margins. It's funny. I'm looking at the list of seven powers here, which are for folks who are new, counter positioning, scale economies, switching costs, network economies, process, power branding, and cornered resource. I'm like, check, check, check, check, check.…

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