[redditor98654]

Not really. I have done multiple AWS pricing and costing exercises while launching services and there was never a direction from the VP to sell it lower than what it costs to build and operate. Cost to build and operate includes everything from salaries, infrastructure and many other line items. And usually things are projected 3-5 years into the future and P&L analysis must show that eventually the service will make a profit. It does make some assumptions about minimum customer adoption for the profit margins to materialize which eventually becomes part of the product and sales teams goals.

The costing model does allow losses to be incurred in the initial years because building the thing is more expensive at first but then it should settle down and revenue should outpace expenses.

What can happen with these open source products being launched as a service is that that initial cost can be cut down by as much as 50-75% but rarely more than that because you still need to build all the surrounding infrastructure, documentation, UI. It still gives AWS an advantage by relying on an existing body of work they can start with where many problems have been thought through and solved. Also you will likely get a good product roadmap skeleton ready to be prioritized which otherwise can be a huge time sink.

In a nutshell, no. AWS won’t sell a service at a loss (there are exceptions of course) but there is room to incur a loss at the beginning but it is priced to eventually turn a profit. Whether that happens for every service in reality is a different story.