Scaling Costs, Network Economy, and Cornered Resource

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Cloud is probably the single greatest scale economies business of all time. Amazon was kind of the first company to ever try and build data centers at this scale because they needed them to run the largest web application, Amazon.com. When you layer on the switching costs, once people are semi-trugging their data into your data centers, there is very real switching costs. And so thus they can charge the lowest prices at similar or higher profit margins than their competitors.

So, how DID an online book retailer end up building the infrastructure layer that powers the entire internet? (Or at least 39% of it, per latest market share data.) While many myths, legends, and some downright falsehoods exist, the real answer to that question deserves a full Acquired episode of its very own. So here it is: the story of Amazon Web Services. Who’s got the truth? Tune in and find out. :)

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