> Because what's their BATNA? Migrating from Azure to AWS when Microsoft doesn't want to let them?
Uh yes, exactly?
Clouds give small customers the first hit free as a loss leader. With very large customers, clouds have to be price competitive because if you're at a large scale, it is totally worth spending millions of dollars for a 5 year plan to change clouds. The people who get screwed are the medium to large customers for whom the cost of changing clouds is too high to recoup in a reasonable timeframe. The moral of the story is be very small or very large, but avoid being medium sized.
>With very large customers, clouds have to be price competitive because if you're at a large scale, it is totally worth spending millions of dollars for a 5 year plan to change clouds.
You've literally just explained why a large company would be perfectly willing to be overcharged by a cloud provider in order of millions of dollars. They would have to pay that for migration anyway and there is always a risk of creating disruptions in the process.
My model is that changing clouds has a taxi-like fee structure: there's a base cost and a percentage cost. Larger firms can just swallow the base cost. Your model seems to be that the percentage cost goes up as the firm gets larger, which I don't think is correct.
Every one of these large enterprises, including the cloud providers themselves, like stability. So they sign multi-year multi-million dollar contracts that expect a minimum spending and offers a negotiated discounted price.
It’s also not just the cloud, enterprises know they get the best pricing when they commit to a vendor and the vendor also bends over backwards to accommodate these large companies. As long as there are 2-3 cloud providers big enterprises will be just fine.
Uh yes, exactly?
Clouds give small customers the first hit free as a loss leader. With very large customers, clouds have to be price competitive because if you're at a large scale, it is totally worth spending millions of dollars for a 5 year plan to change clouds. The people who get screwed are the medium to large customers for whom the cost of changing clouds is too high to recoup in a reasonable timeframe. The moral of the story is be very small or very large, but avoid being medium sized.