IMO it’s even worse than that… it’s a commodity business… your only edge is… significant and destroys the small ISVs, and that is the part we tend to talk about. But in business school it’s a bad business that you want to get out of ASAP.
Having monopoly power like that is a significant edge, yes. It is the holy grail of business people.
Is there any better business than monopoly power?
Having proprietary hardware and software, ‘that customers can’t get anywhere else’ does not imply monopoly, but may lead to it if your company is as fierce and unprincipled as (say) Microsoft was with WIndows years ago or AWS or Apple are today.
The proprietary route only implies a temporary advantage until mass consumer incentives change, and they do for all kinds of reasons, cultural shifts, technology advances and so on. Charging for ‘egress’ to ‘proprietary offerings’ is small brain compared to establishing monopoly power. There are ways business can get double free labor, like social media where is gets free content and fictitious commodities like advertising. The article I think was right to create an analogy between tech infrastructure and land because both are constrained by space and time, bandwidth being the exemplary example of the space and time constraints… just like managing a forest.
The risk of propietary control I believe has been done to death by Lessig, Stallman, Moglen, OSI, FSF and many, many more. The reason we talk about Amazon capturing the hosting revenue from e.g. ElasticSearch is because it is all about building monopoly power on the backs of workers. The fact they are doing that with outsourcing and well, FOSS - I think IS a great candidate for being the final boss. My punt is that Amazon will never buy or build a proprietary solution by spending substantially more time/money than the community can because of the obsevation you made right here, and the doing to death of that model by the FOSS folk. Amazon simply doesn’t need to, it has all it needs to continue to create a bigger edge, which in my head is now more like a cliff… what with saas and the control these companies can exert right through the supply chains, from extracting the raw minerals from the ground right up to controlling users with telemetrics and tracking?