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How AWS Became a Victim of Its Own Success

Listen to the full Amazon Web Services episode here: https://www.youtube.com/watch?v=APvj15_YCqk

David RosenthalhostBen Gilberthost
Oct 28, 20224mWatch on YouTube ↗

At a glance

WHAT IT’S REALLY ABOUT

AWS’s rare misstep: data warehousing and product sprawl challenges

  1. The hosts argue that despite AWS’s exceptional track record, it notably missed the modern cloud data warehouse opportunity that Snowflake capitalized on.
  2. They frame Snowflake’s rise as evidence that Redshift didn’t fully meet developer expectations out-of-the-box, partly due to AWS’s scale-driven constraints around security, operations, and SLAs.
  3. They also suggest AWS built Redshift to fight the “last battle” (Oracle-style warehouses moved to cloud) rather than serving a newer customer segment with different needs.
  4. Finally, they discuss AWS becoming “alphabet soup” with too many services, prompting a shift toward clearer vertical solutions and guardrails to reduce customer confusion—while AWS still dominates revenue and operating income.

IDEAS WORTH REMEMBERING

5 ideas

Snowflake’s success highlights a rare AWS product miss.

The hosts call data warehousing potentially AWS’s “biggest failure,” noting Snowflake became a ~$50B standalone company while running largely on AWS infrastructure.

AWS’s enterprise-scale obligations can slow product elegance.

As a “trusted partner” to IT departments, AWS must meet extensive security, operational, and SLA commitments, which can hamper shipping an intuitive, opinionated product quickly.

Developer-first defaults can beat customizable infrastructure.

They argue Redshift often requires significant customization, while Snowflake is compelling “out of the box,” echoing the early AWS playbook of delighting individual developers.

Redshift was positioned for legacy migration, not new segments.

Citing Ben Thompson, they suggest AWS aimed Redshift at “Oracle-style” warehouse replacement, while many Snowflake customers wouldn’t have been Oracle customers at all.

AWS’s breadth became confusing as service count exploded.

The “two-pizza team” model produced many services without a cohesive strategy, making the console and branding feel overwhelming and hard to navigate.

WORDS WORTH SAVING

5 quotes

Data warehouses. How is Snowflake its own fifty billion dollar company?

— Ben Gilbert

It’s probably AWS’s biggest failure, and the question is, why?

— Ben Gilbert

They’re a victim of their own success on this front.

— Ben Gilbert

It’s right there in the name. They’re fighting Oracle. They’re fighting the last battle with Redshift.

— Ben Gilbert

AWS has kind of been Alphabet soup.

— Ben Gilbert

Snowflake vs. Redshift dynamicsVictim-of-success product constraintsEnterprise trust, security, and SLA overheadFighting Oracle as the “last battle”Developer experience and opinionated defaultsAWS service sprawl (“alphabet soup”)Shift to vertical solutions and guardrails

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