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Yes, because "providing service and support for software running on someone else's hardware" is the same as "maintaining large datacenters, including hardware,

by cwyers 13y ago

Yes, because "providing service and support for software running on someone else's hardware" is the same as "maintaining large datacenters, including hardware, power and cooling costs," and therefore let's just compare revenues without looking at costs.

nl 13y ago
If I was an investor, and I saw Redhat growing revenue at the rate AWS seems to be then I'd be buying as much Redhat stock as I could - even if their profits were depressed because of the investment they were making. I'll quote the investment guidance from the link I posted above[1]: Using our estimate of $3.8bn for 2013 AWS revenues, and applying a ~5x multiple based on the comps noted above, we arrive at a valuation of ~$19bn for the business on an EV/Sales basis (equating to ~$41/share of AMZN stock). Importantly, we believe this to be a conservative valuation multiple, as AWS revenues are growing much faster than any of the comps incorporated above. At an 8x valuation multiple, we estimate the AWS business could be worth $30bn as a stand-alone company, or ~$66/share. Note that they value AWS as a $30bn company right now, almost triple Redhat's $11bn market cap. From [2], we see that Amazon has has invested $4.6 billion in its business over the past year, including $1.4 billion to purchase the building that houses its Seattle headquarters.. Taking out that $1.4 billion, we get $3.2 billion, which almost matches estimates for AWS revenue. So we see AWS is growing like mad, pretty much owns the whole cloud hosting category[3] and MIGHT NOT EVEN BE LOSING AMAZON MONEY, even while they are investing so much that no one else can compete with them on scale of their offerings already. Take my money now. [1] http://www.zdnet.com/amazons-aws-3-8-billion-revenue-in-2013-says-analyst-7000009461/ http://www.zdnet.com/amazons-aws-3-8-billion-revenue-in-2013... [2] http://www.informationweek.com/cloud/infrastructure-as-a-service/amazon-web-services-revenue-new-details/d/d-id/1112068 http://www.informationweek.com/cloud/infrastructure-as-a-ser...? [3] http://readwrite.com/2013/08/21/gartner-aws-now-5-times-the-size-of-other-cloud-vendors-combined http://readwrite.com/2013/08/21/gartner-aws-now-5-times-the-...

by cwyers 13y ago

nl 13y ago

If I was an investor, and I saw Redhat growing revenue at the rate AWS seems to be then I'd be buying as much Redhat stock as I could - even if their profits were depressed because of the investment they were making. I'll quote the investment guidance from the link I posted above[1]: Using our estimate of $3.8bn for 2013 AWS revenues, and applying a ~5x multiple based on the comps noted above, we arrive at a valuation of ~$19bn for the business on an EV/Sales basis (equating to ~$41/share of AMZN stock). Importantly, we believe this to be a conservative valuation multiple, as AWS revenues are growing much faster than any of the comps incorporated above. At an 8x valuation multiple, we estimate the AWS business could be worth $30bn as a stand-alone company, or ~$66/share. Note that they value AWS as a $30bn company right now, almost triple Redhat's $11bn market cap. From [2], we see that Amazon has has invested $4.6 billion in its business over the past year, including $1.4 billion to purchase the building that houses its Seattle headquarters.. Taking out that $1.4 billion, we get $3.2 billion, which almost matches estimates for AWS revenue. So we see AWS is growing like mad, pretty much owns the whole cloud hosting category[3] and MIGHT NOT EVEN BE LOSING AMAZON MONEY, even while they are investing so much that no one else can compete with them on scale of their offerings already. Take my money now. [1] http://www.zdnet.com/amazons-aws-3-8-billion-revenue-in-2013-says-analyst-7000009461/ http://www.zdnet.com/amazons-aws-3-8-billion-revenue-in-2013... [2] http://www.informationweek.com/cloud/infrastructure-as-a-service/amazon-web-services-revenue-new-details/d/d-id/1112068 http://www.informationweek.com/cloud/infrastructure-as-a-ser...? [3] http://readwrite.com/2013/08/21/gartner-aws-now-5-times-the-size-of-other-cloud-vendors-combined http://readwrite.com/2013/08/21/gartner-aws-now-5-times-the-...