Comment by marcosdumay
4 years ago
> But what's to stop _anyone_ else from getting into that same business? And doing it better?
You mean your main business or your complement?
If it's the complement, you commemorate, and try to push more people at entering there and doing it better.
It's about pulling the ladder out from under you, so you grow with the commodity and control risk of upstarts. It's interesting to compare something like how aws/azure/gcp (IaaS and up) commoditize snowflake/databricks (data PaaS and up):
* free complement: drive to zero so you go up, and competitors relatively weak individually. A $T corp like aws doesn't really care if any individual sw vendor (OSS, ...) gets big b/c they're still small wrt aws's offerings. The few emerging big winners like snowflake/databricks makes aws more useful to customers and helps the on-prem -> cloud shift: aws and friends are focused on 30%+ quarterly growth, which is nuts at their scale. They can likewise slowly decrease the ISV margin at their leisure for the non-oss parts, and for now use them to keep juicing the growth.
* pricey moat: the hyperscalers keep reinvesting monopoly-margin-driven profits to be even more untouchable. $T corp building their own chips, HA, etc., layers. It's tough for a YC startup to decide to compete w/ AWS head-on - hw/sw codesign takes a lot of time & $, and getting even just sw would be hard. it took huge amounts of VC $ for snowflake/databricks to get where they are, and yet, it still probably doesn't make sense for them to compete w/ AWS/gcp/az via custom hw etc. (TPUs ..), vs. riding commodity hpc (e.g., databricks achieving its AI vision by reselling GPU hw/sw controlled by Nvidia+Google, unlike their past control of Spark). IBM buying redhat gives a sense of how hard it is to buy in at this point.