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Here's my question: how much will this hurt AWS? Oh, Uber and Lyft alone won't, of course, even though IIRC their IPO's revealed staggering AWS bills. But, th

Here's my question: how much will this hurt AWS? Oh, Uber and Lyft alone won't, of course, even though IIRC their IPO's revealed staggering AWS bills. But, there are a lot of goofy ideas out there masquerading as companies, and the VC spigot just turned off. That spigot was pushing VC money, via a very complex system of middlemen, to AWS. If AWS has half their customers disappear, what does that do to Amazon's bottom line?

moralestapia 4y ago
>If AWS has half their customers disappear Nah, they're not even 1% of AWS. Plus AWS is profitable AF.
- hackernewds 4y ago
  if 0.01% users are 1% of their revenue, that's a huge concerning consolidation. AWS IS indeed in this situation when the full discretionary spending sector struggles. AWS might be super high margins, but it does not exist in a vacuum. AWS cross subsidization powers AMZN retail to be able to run at a <1% margin.
  - moralestapia 4y ago
    Could you elaborate? I don't seem to grasp your point. >AWS cross subsidization powers AMZN retail to be able to run at a <1% margin. I've never truly understood that number, how come they have such low margins where most of the products I see there have a 10-20% markup (at least) vs. the same product in classic "offline" retailers (costco, walmart, etc...)? "But they send it to your home", yeah but they charge you for that too.
    - Spivak 4y ago
      Because in my area Amazon (including amortized cost of prime) is always cheaper and this includes wholesale clubs like Costco and GFS. Like if you need something right now the usual story is to go to a physical store and have them price match Amazon for a 10-30% discount. If I could save money by not shopping on Amazon it would be a no-brainer but it isn’t. Like I’m paying less for the conscience of having it shipped to me.
  - scarface74 4y ago
    Any business on Amazon that uses AWS has to “pay” for AWS services as part of its cost of doing business. It’s counted as AWS revenue and an Amazon retail cost. https://www.lastweekinaws.com/blog/the-aws-service-i-hate-the-most/ https://www.lastweekinaws.com/blog/the-aws-service-i-hate-th... > For example, internal AWS accounts are known as Isengard accounts, after the fortress in “The Lord of the Rings” eventually controlled by the corrupted wizard Saruman. When internal game development teams use Isengard accounts, they must pay (via internal accounting) the same rates for AWS compute cycles that outside retail customers pay, according to people close to the teams. You will often here Disney talk about “transfer costs” to Disney Studios from Disney+ when talking about Disney+‘s content costs. This is similar.
hackernewds 4y ago
same for Stripe. and Twilio. and Segment b2b companies that coasted on free reign will struggle a ton
hotpotamus 4y ago
A lot of those goofy idea companies convinced everyone else that they should spend nearly unlimited amounts on AWS because of opex or other reason, and now everyone believes they need to migrate to cloud as well. Maybe they do, what do I know? I don’t feel a need to contribute to that huge margin that AWS makes, but based on their growth and the interest from lots of legacy businesses in moving to the cloud, I wouldn’t be too worried about them.
ajross 4y ago
AWS revenue is mostly per usage, not per customer. A handful of ML plays excepted, all those startups were tiny things with very little actual resources required. Most of Amazons money surely comes from giant customers like Netflix and Facebook (hell, even Uber and Lyft are probably lost in the noise, they don't stream anything).
cavisne 4y ago
The revenue generated from "lift and shift" enterprise migrations to AWS, where large companies pay accenture to move them to AWS in the least efficient way possible probably dwarfs startup revenues.
- nunez 4y ago
  exactly. there are some stodgy bigcos paying >$10M/mo on AWS. They'll be fine.
doktorhladnjak 4y ago
Not much. Uber largely runs its own data centers with some multi cloud. Travis Kalanick was paranoid that Uber would end up competing with Amazon or Google eventually and did not want to be beholden to them for tech infrastructure. I believe Lyft is entirely on AWS but they are much smaller overall because they’re only in a limited number of markets.

moralestapia 4y ago

>If AWS has half their customers disappear Nah, they're not even 1% of AWS. Plus AWS is profitable AF.

hackernewds 4y ago
if 0.01% users are 1% of their revenue, that's a huge concerning consolidation. AWS IS indeed in this situation when the full discretionary spending sector struggles. AWS might be super high margins, but it does not exist in a vacuum. AWS cross subsidization powers AMZN retail to be able to run at a <1% margin.
- moralestapia 4y ago
  Could you elaborate? I don't seem to grasp your point. >AWS cross subsidization powers AMZN retail to be able to run at a <1% margin. I've never truly understood that number, how come they have such low margins where most of the products I see there have a 10-20% markup (at least) vs. the same product in classic "offline" retailers (costco, walmart, etc...)? "But they send it to your home", yeah but they charge you for that too.
  - Spivak 4y ago
    Because in my area Amazon (including amortized cost of prime) is always cheaper and this includes wholesale clubs like Costco and GFS. Like if you need something right now the usual story is to go to a physical store and have them price match Amazon for a 10-30% discount. If I could save money by not shopping on Amazon it would be a no-brainer but it isn’t. Like I’m paying less for the conscience of having it shipped to me.
- scarface74 4y ago
  Any business on Amazon that uses AWS has to “pay” for AWS services as part of its cost of doing business. It’s counted as AWS revenue and an Amazon retail cost. https://www.lastweekinaws.com/blog/the-aws-service-i-hate-the-most/ https://www.lastweekinaws.com/blog/the-aws-service-i-hate-th... > For example, internal AWS accounts are known as Isengard accounts, after the fortress in “The Lord of the Rings” eventually controlled by the corrupted wizard Saruman. When internal game development teams use Isengard accounts, they must pay (via internal accounting) the same rates for AWS compute cycles that outside retail customers pay, according to people close to the teams. You will often here Disney talk about “transfer costs” to Disney Studios from Disney+ when talking about Disney+‘s content costs. This is similar.

hackernewds 4y ago

same for Stripe. and Twilio. and Segment b2b companies that coasted on free reign will struggle a ton

hotpotamus 4y ago

A lot of those goofy idea companies convinced everyone else that they should spend nearly unlimited amounts on AWS because of opex or other reason, and now everyone believes they need to migrate to cloud as well. Maybe they do, what do I know? I don’t feel a need to contribute to that huge margin that AWS makes, but based on their growth and the interest from lots of legacy businesses in moving to the cloud, I wouldn’t be too worried about them.

ajross 4y ago

AWS revenue is mostly per usage, not per customer. A handful of ML plays excepted, all those startups were tiny things with very little actual resources required. Most of Amazons money surely comes from giant customers like Netflix and Facebook (hell, even Uber and Lyft are probably lost in the noise, they don't stream anything).

cavisne 4y ago

The revenue generated from "lift and shift" enterprise migrations to AWS, where large companies pay accenture to move them to AWS in the least efficient way possible probably dwarfs startup revenues.

nunez 4y ago
exactly. there are some stodgy bigcos paying >$10M/mo on AWS. They'll be fine.

doktorhladnjak 4y ago

Not much. Uber largely runs its own data centers with some multi cloud. Travis Kalanick was paranoid that Uber would end up competing with Amazon or Google eventually and did not want to be beholden to them for tech infrastructure. I believe Lyft is entirely on AWS but they are much smaller overall because they’re only in a limited number of markets.