Amazon Web Services (AWS)

AWS is invisible infrastructure that makes the internet possible. The company provides compute (EC2), storage (S3), and networking - boring backend services that thousands of companies build on. Revenue is $90 billion annually, but the economic value enabled is orders of magnitude larger. Startups that couldn't afford $100,000 in server costs in 2006 now scale to millions of users for $1,000/month. Remove AWS and vast portions of the internet don't just slow down - they suffocate.

What's remarkable is how AWS captures value. The company reduced prices 100+ times since launch, building trust and growing the ecosystem rather than extracting maximum rents. The strategy works because AWS operates at the infrastructure layer - capturing small percentages of massive transaction volumes. But the December 2021 us-east-1 outage revealed the strategy's vulnerability: companies with multi-cloud failover stayed online while single-provider dependents went dark.

AWS also pioneered flexible pricing: On-Demand instances ($1.00/hour with no commitment) versus Reserved Instances ($0.50/hour with 3-year lock-in). COVID exposed the trade-off - companies with on-demand flexibility scaled down instantly when revenue dropped, while reserved-instance customers paid for unused capacity. The lesson: shared infrastructure beats proprietary infrastructure, but don't let shared infrastructure become a single point of failure. And flexibility costs more upfront but pays dividends when environments shift.