AWS wasn't about selling spare capacity, it was built as a stand alone service.
All activities would appear to evolve, the end state is one of commodity and utility provision. What is happening today is simply a shift from products to utility services. We happen to call this "Cloud".
Utility does not mean centralisation (or consolidation to a few providers), the two are entirely different and governed by different economic forces. A utility service can be provided by a large number of different providers in a market.
On Open Source
A market of utility compute providers needs to solve the issue of semantic interoperability. In practice, to create a "free" (as in non constrained) rather than captured market, the technology must be provided through an open source reference model.
Open Stack is guaranteed to win
So, can we assume that OpenStack will win because it plans to create a federated market based upon a common open source reference model ... err No. There's that little issue of execution.
Whilst an open source approach has all the right advantages, you cannot assume that this will be OpenStack for many reasons :-
- There are multiple competitors to OpenStack - CloudStack and Eucalyptus to name two. Each has the potential to build a market and competing ecosystem.
- The rate of innovation, customer focus and efficiency grows with the size of AWS's ecosystem and so critical to competition is building a bigger ecosystem. Without visibly co-opting the EC2 / S3 / EBS APIs then OpenStack will put itself at a disadvantage.
- It is likely that a price war will develop between AWS vs GCE which will only increase demand (Jevons' Paradox). If a competing ecosystem is not in place at this time, it will get left further behind.
- The scale advantage is not about efficiency alone but rate of innovation and customer focus. With big enough ecosystems then Amazon and Google can continually outstrip new competitors i.e. they will continually be further ahead and increasingly so.
If you asked me back in 2010 should OpenStack win this game - I would have said that in all probability ... yes. Rick Clark was key in the project and he knew the game. However, ask me that same question today and you'll get a different answer.
This isn't because the approach of building a competitive market around an open source reference model is wrong but instead the execution of this project. Which is why I say they desperately need a Benevolent Dictator to get things sorted fast. Someone like Lew Tucker.