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If AWS is spun off, then I don't believe retail would be able to survive. Online retail vs. brick and mortar still has a lot of growth left and it won't make se

If AWS is spun off, then I don't believe retail would be able to survive. Online retail vs. brick and mortar still has a lot of growth left and it won't make sense to spin it off until it grabs an even bigger piece of the pie.

protastus 4y ago
This is the essence of anti-trust. The Amazon retail business would struggle to compete effectively on its own, and would have to work on its weaknesses. As a whole, the economy would be better off.
- repsilat 4y ago
  You could argue it both ways. The essence of US antitrust is consumer harm. If Amazon were broken up the retail arm might die, and consumers would arguably suffer -- they wouldn't receive the subsidies they currently get from AWS, they'd pay more for products and get slower shipping. To argue that Amazon retail consumers would be better off without the subsidies from AWS takes some slightly more complex logic -- that increased Amazon prices would lead to more competition and so lead to lower prices (or better quality). IMO that argument is tenuous. If Amazon, having killed off its competition, were to raise prices I think you'd have an argument, but at the "undercutting" stage I think (IANAL) they're safe.
  - bsder 4y ago
    > If Amazon were broken up the retail arm might die, and consumers would arguably suffer -- they wouldn't receive the subsidies they currently get from AWS, they'd pay more for products and get slower shipping. This isn't necessarily a downside for consumers as you might get actual customized retail shops opening up again. This would enable you to get your stuff faster than delivery. I would love to have a "technical bookstore" back again, for example. Amazon's retail arm imploding would enable that business to return.
- drstewart 4y ago
  How far do you take this? An individual developer would struggle to compete effectively on its own, and would have to work on their weaknesses. As a whole, the economy would be better off. So should we break up every venture of more than one person?
jcdavis 4y ago
Sounds like for the best for the economy (also presumably, never going to happen).
cduzz 4y ago
I believe that if "storefront" was spun off of AWS, AWS would falter less than a decade. Having an anchor tenant with "2014" problems in 2010, or "2020" problems in 2015, especially if they roll up to the same CEO as your org, gives the org a huge head start in making software and platforms that will, once 2020 actually rolls around be tremendously compelling to everyone else.
- tofuahdude 4y ago
  For what reasons would AWS falter in less than a decade if it were on its own?
  - cduzz 4y ago
    Amazon provides AWS with problems to solve that are going to be general problems to solve in 2-3 years. Amazon developed DynamoDB and S3 and handed them off to AWS to operate, for instance. Without Amazon's innovation funnel, AWS will be Rackspace in 10 years (well, maybe Oracle in 5 years). Maybe they'd keep adding more hosted services (Announcing ClickTower, our columnar database as a service!) but that's not innovation.
MuffinFlavored 4y ago
> If AWS is spun off, then I don't believe retail would be able to survive. At a really high/overly-simplified level, how far off from probability is their retail section? Do they just need to semi-aggressively tweak some margins about 2-3% in maybe their shipping cost/subsidizing department, slow down on R&D/reinvestment into this sector by about 2-3%, and maybe swing their marketplace fees 1% and boom, they are in business? Or is it more complicated? I wonder how much fat there is to trim in this sector of their business, if any.
sokoloff 4y ago
Retail survived for over a decade before AWS launched (and when AWS launched, it obviously wasn't carrying the company for many years after that). Why do people think Amazon retail couldn't survive now without AWS, when it survived just fine before AWS? (And now has Prime, advertising, and 3PS/marketplace fees as a logical part of the Retail/non-AWS unit.)
steveBK123 4y ago
I wonder what we will see from AWS as we go through an economic cycle though. Great business when everyone wants to scale up. Maybe not a great business when people want to scale down.
- __derek__ 4y ago
  AWS has a lot of pre-committed revenue[1]: > For contracts with original terms that exceed one year, those commitments not yet recognized were $110.4 billion as of December 31, 2022. The weighted average remaining life of our long-term contracts is 3.7 years. However, the amount and timing of revenue recognition is largely driven by customer usage, which can extend beyond the original contractual term. Even if new business stops, and that revenue extends beyond contracted terms, it should provide a nice cushion. [1]: https://d18rn0p25nwr6d.cloudfront.net/CIK-0001018724/d2fde7ee-05f7-419d-9ce8-186de4c96e25.pdf https://d18rn0p25nwr6d.cloudfront.net/CIK-0001018724/d2fde7e... (10-K, page 49)
  - steveBK123 4y ago
    When a startup gets liquidated, who is paying their AWS bills for the next 5 years?
    - __derek__ 4y ago
      Ha, these contracts are not with start-ups.
whatever1 4y ago
Amazon retail is the biggest client of AWS, and a lot of dogfooding of new AWS products is forced. AWS has the perfect large-scale lab to test things.
moneywoes 4y ago
They would just increase their prices and be fine
deleted 4y ago
[deleted]

protastus 4y ago

This is the essence of anti-trust. The Amazon retail business would struggle to compete effectively on its own, and would have to work on its weaknesses. As a whole, the economy would be better off.

repsilat 4y ago
You could argue it both ways. The essence of US antitrust is consumer harm. If Amazon were broken up the retail arm might die, and consumers would arguably suffer -- they wouldn't receive the subsidies they currently get from AWS, they'd pay more for products and get slower shipping. To argue that Amazon retail consumers would be better off without the subsidies from AWS takes some slightly more complex logic -- that increased Amazon prices would lead to more competition and so lead to lower prices (or better quality). IMO that argument is tenuous. If Amazon, having killed off its competition, were to raise prices I think you'd have an argument, but at the "undercutting" stage I think (IANAL) they're safe.
- bsder 4y ago
  > If Amazon were broken up the retail arm might die, and consumers would arguably suffer -- they wouldn't receive the subsidies they currently get from AWS, they'd pay more for products and get slower shipping. This isn't necessarily a downside for consumers as you might get actual customized retail shops opening up again. This would enable you to get your stuff faster than delivery. I would love to have a "technical bookstore" back again, for example. Amazon's retail arm imploding would enable that business to return.
drstewart 4y ago
How far do you take this? An individual developer would struggle to compete effectively on its own, and would have to work on their weaknesses. As a whole, the economy would be better off. So should we break up every venture of more than one person?

jcdavis 4y ago

Sounds like for the best for the economy (also presumably, never going to happen).

cduzz 4y ago

I believe that if "storefront" was spun off of AWS, AWS would falter less than a decade. Having an anchor tenant with "2014" problems in 2010, or "2020" problems in 2015, especially if they roll up to the same CEO as your org, gives the org a huge head start in making software and platforms that will, once 2020 actually rolls around be tremendously compelling to everyone else.

tofuahdude 4y ago
For what reasons would AWS falter in less than a decade if it were on its own?
- cduzz 4y ago
  Amazon provides AWS with problems to solve that are going to be general problems to solve in 2-3 years. Amazon developed DynamoDB and S3 and handed them off to AWS to operate, for instance. Without Amazon's innovation funnel, AWS will be Rackspace in 10 years (well, maybe Oracle in 5 years). Maybe they'd keep adding more hosted services (Announcing ClickTower, our columnar database as a service!) but that's not innovation.

MuffinFlavored 4y ago

> If AWS is spun off, then I don't believe retail would be able to survive. At a really high/overly-simplified level, how far off from probability is their retail section? Do they just need to semi-aggressively tweak some margins about 2-3% in maybe their shipping cost/subsidizing department, slow down on R&D/reinvestment into this sector by about 2-3%, and maybe swing their marketplace fees 1% and boom, they are in business? Or is it more complicated? I wonder how much fat there is to trim in this sector of their business, if any.

sokoloff 4y ago

Retail survived for over a decade before AWS launched (and when AWS launched, it obviously wasn't carrying the company for many years after that). Why do people think Amazon retail couldn't survive now without AWS, when it survived just fine before AWS? (And now has Prime, advertising, and 3PS/marketplace fees as a logical part of the Retail/non-AWS unit.)

steveBK123 4y ago

I wonder what we will see from AWS as we go through an economic cycle though. Great business when everyone wants to scale up. Maybe not a great business when people want to scale down.

__derek__ 4y ago
AWS has a lot of pre-committed revenue[1]: > For contracts with original terms that exceed one year, those commitments not yet recognized were $110.4 billion as of December 31, 2022. The weighted average remaining life of our long-term contracts is 3.7 years. However, the amount and timing of revenue recognition is largely driven by customer usage, which can extend beyond the original contractual term. Even if new business stops, and that revenue extends beyond contracted terms, it should provide a nice cushion. [1]: https://d18rn0p25nwr6d.cloudfront.net/CIK-0001018724/d2fde7ee-05f7-419d-9ce8-186de4c96e25.pdf https://d18rn0p25nwr6d.cloudfront.net/CIK-0001018724/d2fde7e... (10-K, page 49)
- steveBK123 4y ago
  When a startup gets liquidated, who is paying their AWS bills for the next 5 years?
  - __derek__ 4y ago
    Ha, these contracts are not with start-ups.

whatever1 4y ago

Amazon retail is the biggest client of AWS, and a lot of dogfooding of new AWS products is forced. AWS has the perfect large-scale lab to test things.

moneywoes 4y ago

They would just increase their prices and be fine

deleted 4y ago

[deleted]