AWS is Intimidating—but not in the way you think it is

No, not its size and growth, but its offerings and pricing. Thankfully, there is an alternative

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AWS has hundreds of services with thousands of new functions and features added in just the last year alone. Pricing that is fiendishly complex and difficult to predict. Finally, add a portal that is just as complicated, and you have got the 800-pound gorilla of the cloud business. But you do have a choice. Ready to go swimming?

It’s hard to believe that when AWS got started back in 2006 all it offered was storage: yes, just the Simple Storage Service or S3. It shortly added Elastic Compute Cloud (EC2) and Elastic Block Storage (EBS). AWS originally focused on developers in enterprises with these seemingly simple choices that took some time to master and importantly you were not sure of what your final cost would be because of volume related I/O charges. 

Amazon has matured into a behemoth with a staggeringly large, complex portfolio of services. And it’s not alone: primary competitors, Microsoft and Google, playing catchup, have also blossomed into complex offerings all the way up to machine learning. Things have gotten so complex that a whole cadre of “partners” has sprung up devoted solely to mastering the intricacies of their offerings so that companies can use cloud services. Pricing has gotten so intricate that you need a tool (such as Cloudability or Cloudyn) and staff just to keep track of spending, discounts, optimum product selection, etc.

But, let’s say you’re an entrepreneurial developer, maybe just a one- or two-person shop—can’t you get some KISS cloud? All you need is to easily stand up some machines with predictable pricing to run code or the website you’ve built. Turns out you are not alone; there are millions of you. Ah, got to love the magic of the marketplace. Do you want to build a business then find a need and fill it?

Several entrepreneurs saw your need and responded. In 2011, they created DigitalOcean. You bought something they called a “droplet” that was analogous to the physical servers you used to use (compute, memory and storage, all in one). Pricing was simple, too: just a low monthly fee per month and no activity related charges. The smallest was just $5 per month. Sounds appealing to a developer like yourself but what about this kind of business model’s long term-business viability? Why wouldn’t AWS just drop prices or create a similar offering and just crush it?

This is where DigitalOcean’s insight really shone. Whether calculated or just intuitive, it went about building the brand. The user’s (developer’s) experience was designed from the start to be superior. Interacting with DigitalOcean is through a straightforward and simple portal. (Ironically, DigitalOcean seemed to have learned the “three click rule” better than AWS did.) It also set out to build a community of users with tons of documentation, free support and forums.

As we all know, developers connect to each other all the time. DigitalOcean’s reputation as easy, low-priced, and supportive spread rapidly and sales blossomed. In fact, word of mouth alone has grown the organization over the years to a respectable $175 million run rate. The model is not unique, but it is rare. Atlassian did the same but for software tools and look where it got its founders: loved and rich.

Still, the marketplace and competition continually evolve. It took a while but in 2016 AWS finally countered with a similar service called Lightsail. There are also other competitors, Linode and Vultr, out there giving some stiff price competition. Plus, ironically, success has forced DigitalOcean to expand its portfolio of services to meet the needs of its developer’s clients as they grew. It’s not the monster of AWS but it now or will soon have a lot of the functions and features that are inherent in AWS’s IaaS base offering.

So, does that mean DigitalOcean is now a look-alike to AWS? Probably not; the user experience for developers still appears superior. The company claims it now has 1 million of those as customers—not a bad customer base. Looking back, it’s amazing to see how many would-be AWS competitors have bit the dust as they tried to go head-to-head, but this small company survives and even thrives because it laser focused on a customer niche and built all aspects of the company to meet its needs. Are you going for a swim?

Copyright © 2018 IDG Communications, Inc.

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