Sunday, October 12, 2014

AWS Profitability - Ready for the Cloud Apocalypse?

In this episode, the Radio Free HPC team discuss the possibility of a future where the Big 3 (Amazon, Google, and Microsoft) figure out that Cloud is not profitable and pull the plug. If that Cloud Apocalypse sounds far fetched, check out these recent news nuggets:
  • An article in The Register that describes how Amazon lost money despite $20 Billion in revenue.
  • Business Week says that Amazon’s cloud unit, AWS, is one of the fastest-growing software businesses of all time, as Bloomberg Businessweek‘s Ashlee Vance recently wrote. It’s also in a hotly contested market. Google, Amazon, and Microsoft (MSFT) have been slashing prices to lure customers from one another.
  • The Wall Street Journal says that "The developments point to the possibility that profit margins in Amazon's cloud unit—believed to be much higher than its online retailing business—face a long-term squeeze that add to investor concerns about the company's profitability."
If you're more into numbers, the team has put together a spreadsheet of AWS revenue that does not paint a rosy picture.

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