AWS destroyed the high-end cloud hosting market with the launch of AWS Cloud services and continues to dominate the market of high-end, high-availability cloud solutions.
AWS pulled in over $3.2 billion in revenue in Q3 of 2016. This accelerates AWS to an excess of $10 billion annually. AWS currently controls over 31% of the world’s cloud infrastructure market, putting it well above it’s competitors which control about 24% of the market.
With the new launch of AWS Lightsail, Amazon is taking a stab at high-quality and cheap VPS hosting services. These include Digital Ocean, Linode, and countless others.
The appeal of DO and Linode up to this point has been that they are products focused on Development Teams, instead of System Engineering and DevOps teams. The COE (Cost of Entry) was as low as $5 for a 512MB 1 CPU core, and 20GB of SSD based storage. These boxes were perfect for those developing new software and QC/QA of existing GA solutions in a tightly controlled environment.
With the new AWS Lightsail, users now have access to a control panel as simple and almost visually matching that of Digital Ocean. AWS now simplifies the deployment process and currently only offers two ISO or “AWS AMIs”. Currently, AWS offers both AWS Linux and Ubuntu, both which are AWS’s best selling AMI’s in production.
With the new launch of Lightsail, AWS also implemented a robust and impressive API allowing for power-users to tie Lightsail into their current VPC and EC2 environments.
While Digital Ocean will surely innovate and expand their current service offering to compete with AWS Lightsail, it will be difficult to compete with Lightsail having access to the ever expanding service offering from AWS that Lightsail currently integrates with. AWS is currently matching the “rock bottom” pricing that the VPS industry has already hit.
Digital Ocean has one thing going for them. Their simplistic and easy to use panel and API still allow for new and inexperienced developers to deploy and implement VPS servers with ease, a market that AWS is bound to target.
Digital ocean reported in August that it has retained around 700,000 customers compared to AWS which retained close to 1,000,000 in the same month. While only time will tell, AWS is definitely targeting low-priced VPS providers and with the reputation and service offering of AWS, they’re guaranteed to capture some of the market share that Digital Ocean has captured over the last few years.