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Hey, one of these articles about “Elon’s Twitter isn’t paying its bills” finally said the quiet part out loud: “…AWS is not willing to renegotiate the five-and

by fwlr 4y ago

Hey, one of these articles about “Elon’s Twitter isn’t paying its bills” finally said the quiet part out loud: “…AWS is not willing to renegotiate the five-and-a-half year contract it signed with Twitter in 2020 … contract required Twitter to pay $510m over that period … signed when Twitter was expecting to [use AWS heavily], but that never occurred … meaning that Twitter is not fully making use of the contract. … Twitter [paid] $10m in AWS costs a few weeks ago … at least $70 million still outstanding…” “Twitter uses Google Cloud to a greater degree … its own five-year contract worth $1bn … Twitter is up to date on payments” So a $0.5bn contract for the cloud that apparently just serves Twitter Spaces, and a $1bn contract for the cloud that serves the rest of Twitter. “Not fully making use of that contract” indeed, I wonder what the actual utilization metrics say. We can guess: the article claims Twitter paid $10m while owing at least $80m, so this means Twitter is using at most 1/8th of the capacity. That’s very close to single-digit-percentage utilization - I understand why Amazon is avoiding re-negotiating that contract, it’s literally free money. Non-payment will certainly bring them back to the negotiating table. Reporting on Twitter’s other non-payments of rent, services, etc. has been more careful to not hint at the reason for non-payment. After all, when someone’s being evasive about paying the rent, we all know it’s because they don’t have the money.

tsol 4y ago
>That’s very close to single-digit-percentage utilization - I understand why Amazon is avoiding re-negotiating that contract, it’s literally free money. There's another reason for them to avoid this-- to not create the precedence that people can get out of contracts if they decide they don't like them anymore. If they let someone do this, even a big player like Twitter, that could lead to a lot of trouble in the future with other players trying to re-negotiate
- comte7092 4y ago
  It’s like a smaller scale replay of Elon trying to back of his agreement to purchase Twitter last year.
- fwlr 4y ago
  A half-billion-dollar contract is almost certainly going to have re-negotiation procedures specified within (Amazon would naturally be worried that Twitter could easily over-use the services, so they’d want provisions to change the contract in the direction of higher costs - which Twitter would obviously only agree to if the provisions were symmetric). Most likely these provisions exist but aren’t all that binding when it comes to forcing the parties to come to the table and Amazon is dragging their feet on entering the re-negotiation clauses so they can have more months or years of the free money contract.

by fwlr 4y ago

tsol 4y ago

>That’s very close to single-digit-percentage utilization - I understand why Amazon is avoiding re-negotiating that contract, it’s literally free money. There's another reason for them to avoid this-- to not create the precedence that people can get out of contracts if they decide they don't like them anymore. If they let someone do this, even a big player like Twitter, that could lead to a lot of trouble in the future with other players trying to re-negotiate

comte7092 4y ago
It’s like a smaller scale replay of Elon trying to back of his agreement to purchase Twitter last year.
fwlr 4y ago
A half-billion-dollar contract is almost certainly going to have re-negotiation procedures specified within (Amazon would naturally be worried that Twitter could easily over-use the services, so they’d want provisions to change the contract in the direction of higher costs - which Twitter would obviously only agree to if the provisions were symmetric). Most likely these provisions exist but aren’t all that binding when it comes to forcing the parties to come to the table and Amazon is dragging their feet on entering the re-negotiation clauses so they can have more months or years of the free money contract.