The problem for Amazon’s competitors, as always, is that Amazon is headed by a CEO who is perfectly happy not to make any profit on the goods he sells. The Street loves Amazon anyway because analysts believe in Jeff Bezos’s larger vision, which is that the internet is still (still!) in its nascent stages, and what matters is grabbing as much market share as possible while sucking all the air out of the room so your competitors suffocate and, some day, you are the biggest retail/media/cloud company on the planet.
As evidenced by Eschenbach’s comments, Amazon’s competitors in cloud computing are in denial about how well Amazon’s strategy of being the lowest price provider will work in a space as high tech, and high stakes, as cloud computing. Delivering books is not the same thing as guaranteeing that a Fortune 500 company’s most critical IT systems are always available, they say. Amazon’s cloud is unreliable, they observe.