In some respects it's Google's model too. They gave away Google Apps free to small businesses for years as they pursued Microsoft's Exchange Server market. At first Google Apps was free for up to 100 users, then 50, then 10. Now they charge $5 per user per month for new plans. Legacy pricing is grandfathered so they didn't really piss anybody off in the process, but it seems pretty clear the strategy was to subsidize the product and accumulate market share.
I'd actually be worried with Google. They've demonstrated a willingness to shut down revenue sinks even if it costs them good will. If these companies find themselves in a position that they're subsidizing their cloud computing offerings with profits made elsewhere, it might make more sense just to pull the plug.
Providing cloud computing services is bulk business where the economies of scale is important Google is itself cloud computing company. When they sell resources to others, it's way to become bigger and reduce cost margins for the platform they are using for themselves.
As long as there are people who pay more for the Google cloud service than Google's own usage is worth, selling to others reduces the overall costs of computing for Google.
> They've demonstrated a willingness to shut down revenue sinks even if it costs them good will.
Google isn't running a charity. Shutting down losing services is a smart business decision. If you see the cloud going the way of the typewriter, then you should also be looking elsewhere to run your computing resources.
Yeah, I don't disagree at all. I think Amazon is making a longer term strategic move with AWS and is more likely to swallow a few years of not making any money than Google however. Of course a couple years ago I would have said the same about Google, but they've been on a bit of a tear recently where that doesn't seem to be as much the case anymore.
