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Quick article summary "For the second quarter, Amazon recorded an $857 million profit, or $1.78 a share, compared with $92 million, or 19 cents, a year earlier

by kartD 10y ago

Quick article summary "For the second quarter, Amazon recorded an $857 million profit, or $1.78 a share, compared with $92 million, or 19 cents, a year earlier, as sales rose to $30.4 billion from $23.19 billion. Analysts were expecting a profit of $1.11 a share, according to the average estimate compiled by Thomson Reuters. Amazon had forecast sales of between $28 billion and $30.5 billion. Helping prop up results was the Amazon Web Services cloud computing division, which rents computing power to other companies. AWS increased revenue to $2.89 billion, up from $1.82 billion a year earlier. The unit appears on track to exceed Amazon Chief Executive Jeff Bezos’s goal of reaching $10 billion in sales this year."

JoshGlazebrook 10y ago
That last part shouldn't be hard with the overpriced bandwidth costs AWS charges.
- meterplech 10y ago
  Curious as to why you say that. Do you mean in comparison to other cloud infrastructure providers or in comparison or rolling your own infrastructure?
  - tedunangst 10y ago
    Comparison: EC2 charges 9 cents per GB, linode charges 2 cents and starts with a much larger (2TB vs 1GB) free quota. Rackspace charges 12 cents, Azure about 9 cents too.
    - btilly 10y ago
      Those figures suggest that linode seriously oversubscribes their service and expects people not to really use it. EC2 and Azure are in the right cost range. And Rackspace's customer service is expensive.
      - NKCSS 10y ago
        At the exchange levels, you don't pay for traffic... you pay a subscription membership for the IX and you pay for your hardware; you might have some contracts for peering and transit that could cost money, but no where is it done based on data flowing through the network... It's all just to extract money based on usage with the rationale that people who use more can pay more, but it's not like they get a higher bill when they have more traffic, therefore, you can't say that a provider is selling their BW to cheap; maybe they already paid for all their fixed costs via their compute pricing....
      - mythz 10y ago
        Pure B.S. Cloud providers over charge for bandwidth because they can, they treat it like a luxury cost like RAM where if you need more bandwidth you can usually afford to pay for it. It's not the "right" cost, it's the price AWS set which Azure copied. Bandwidth is dirt cheap outside of the Cloud, e.g. I'm getting 30 TB of bandwidth as part of my 64GB RAM / 500GB SSD / Quad-Core i7 Skylake for €39 /mo (https://www.hetzner.de/us/hosting/produkte_rootserver/ex41sssd https://www.hetzner.de/us/hosting/produkte_rootserver/ex41ss...). Which roughly equates to €0.0009 /GB that also includes the cost of hosting entire server with resources that would cost an order of magnitude more on AWS/Azure.
        jonknee 10y ago
        > I'm getting 30 TB of bandwidth as part of my 64GB RAM / 500GB SSD / Quad-Core i7 Skylake for €39 /mo Yes, you're getting cheap pricing from an oversubscribed line.
        mythz 10y ago
        Or not, just ran a speed test: getting 160% more bandwidth on Hetzner than my EC2 instance.
        notyourwork 10y ago
        One data point is clearly indicative enough to be conclusive.
- freyir 10y ago
  If it's overpriced, presumably customers will shop elsewhere or avoid cloud services altogether?
  - deleted 10y ago
    [deleted]
  - runeks 10y ago
    When overpricing happens, it's usually because the customers had nowhere else to go in the first place. I guess the amount you can overprice is proportional to the value you add. But then is it really over pricing?
  - adventured 10y ago
    It's significantly overpriced, though most services don't demand enough bandwidth to make it a big enough cost disadvantage to turn them away from eg AWS. That isn't the case for all services, but it is the case for most. If you're big enough to run up a large bandwidth bill on AWS, more often than not you can afford it; if you're not big, you won't typically be running up that kind of bandwidth bill. There are cases that are the exception of course (high traffic services with poor business models, video heavy sites with weak monetization, etc). I've seen good arguments that the cloud services keep bandwidth costs high on purpose to restrict the types of services that attempt to use (or abuse) their networks. I haven't seen any other great arguments that explain the massive gap between a typical large dedicated host and eg Azure / Google / AWS (all of which can command far cheaper bandwidth costs).
    - vgt 10y ago
      I can speak for Google, not AWS or Azure. Google's network is smart in several ways: - If you are trying to send a packet from one Google AZ to another, it will traverse Google network only, never hitting the public web.. without a VPN/VPC setup - If you are trying to reach a service on Google Network, you hit the Google frontend at one of the many Points of Presence around the world, from which point it's a straight path to nearest DC - If you are trying to reach a customer from your VMs on Google, your packet will be taken as close to your customer as possible on Google backbone For "cheaper egress" there are CDN providers, and both AWS and Google have their own CDNs as well.

by kartD 10y ago

JoshGlazebrook 10y ago

That last part shouldn't be hard with the overpriced bandwidth costs AWS charges.

meterplech 10y ago
Curious as to why you say that. Do you mean in comparison to other cloud infrastructure providers or in comparison or rolling your own infrastructure?
- tedunangst 10y ago
  Comparison: EC2 charges 9 cents per GB, linode charges 2 cents and starts with a much larger (2TB vs 1GB) free quota. Rackspace charges 12 cents, Azure about 9 cents too.
  - btilly 10y ago
    Those figures suggest that linode seriously oversubscribes their service and expects people not to really use it. EC2 and Azure are in the right cost range. And Rackspace's customer service is expensive.
    - NKCSS 10y ago
      At the exchange levels, you don't pay for traffic... you pay a subscription membership for the IX and you pay for your hardware; you might have some contracts for peering and transit that could cost money, but no where is it done based on data flowing through the network... It's all just to extract money based on usage with the rationale that people who use more can pay more, but it's not like they get a higher bill when they have more traffic, therefore, you can't say that a provider is selling their BW to cheap; maybe they already paid for all their fixed costs via their compute pricing....
    - mythz 10y ago
      Pure B.S. Cloud providers over charge for bandwidth because they can, they treat it like a luxury cost like RAM where if you need more bandwidth you can usually afford to pay for it. It's not the "right" cost, it's the price AWS set which Azure copied. Bandwidth is dirt cheap outside of the Cloud, e.g. I'm getting 30 TB of bandwidth as part of my 64GB RAM / 500GB SSD / Quad-Core i7 Skylake for €39 /mo (https://www.hetzner.de/us/hosting/produkte_rootserver/ex41sssd https://www.hetzner.de/us/hosting/produkte_rootserver/ex41ss...). Which roughly equates to €0.0009 /GB that also includes the cost of hosting entire server with resources that would cost an order of magnitude more on AWS/Azure.
      - jonknee 10y ago
        > I'm getting 30 TB of bandwidth as part of my 64GB RAM / 500GB SSD / Quad-Core i7 Skylake for €39 /mo Yes, you're getting cheap pricing from an oversubscribed line.
        mythz 10y ago
        Or not, just ran a speed test: getting 160% more bandwidth on Hetzner than my EC2 instance.
        notyourwork 10y ago
        One data point is clearly indicative enough to be conclusive.
freyir 10y ago
If it's overpriced, presumably customers will shop elsewhere or avoid cloud services altogether?
- deleted 10y ago
  [deleted]
- runeks 10y ago
  When overpricing happens, it's usually because the customers had nowhere else to go in the first place. I guess the amount you can overprice is proportional to the value you add. But then is it really over pricing?
- adventured 10y ago
  It's significantly overpriced, though most services don't demand enough bandwidth to make it a big enough cost disadvantage to turn them away from eg AWS. That isn't the case for all services, but it is the case for most. If you're big enough to run up a large bandwidth bill on AWS, more often than not you can afford it; if you're not big, you won't typically be running up that kind of bandwidth bill. There are cases that are the exception of course (high traffic services with poor business models, video heavy sites with weak monetization, etc). I've seen good arguments that the cloud services keep bandwidth costs high on purpose to restrict the types of services that attempt to use (or abuse) their networks. I haven't seen any other great arguments that explain the massive gap between a typical large dedicated host and eg Azure / Google / AWS (all of which can command far cheaper bandwidth costs).
  - vgt 10y ago
    I can speak for Google, not AWS or Azure. Google's network is smart in several ways: - If you are trying to send a packet from one Google AZ to another, it will traverse Google network only, never hitting the public web.. without a VPN/VPC setup - If you are trying to reach a service on Google Network, you hit the Google frontend at one of the many Points of Presence around the world, from which point it's a straight path to nearest DC - If you are trying to reach a customer from your VMs on Google, your packet will be taken as close to your customer as possible on Google backbone For "cheaper egress" there are CDN providers, and both AWS and Google have their own CDNs as well.