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>you're also paying Amazon's profits. Are you? Amazon is not known for posting profits, and is quite possibly operating AWS at a loss. They have promised to
by skwirl 12y ago
>you're also paying Amazon's profits.
Are you? Amazon is not known for posting profits, and is quite possibly operating AWS at a loss.
They have promised to show financial results for AWS itself with the quarterly report being released next month, so we'll see.
- Alupis 12y agoProfit for something like AWS is likely difficult to put a number on. They built it so they could run Amazon.com off the infrastructure, but then decided they could make money leasing their under-subscribed portions. If they are not making a cut-and-dry profit from AWS (I'd fathom they are, they are one of the most expensive cloud providers and many other providers turn a healthy profit), then they are at least dramatically offsetting their own Amazon.com infrastructure costs which are mandatory anyway.
- coleca 12y agoActually, they built AWS as a business on its own right from the start and only later moved Amazon.com onto AWS. http://www.networkworld.com/article/2891297/cloud-computing/the-myth-about-how-amazon-s-web-service-started-just-won-t-die.html http://www.networkworld.com/article/2891297/cloud-computing/...
- deitcher 12y agoAmazon is not know for posting operating profits, because they plow funds back into new research and businesses. But they most definitely operate with gross margins on everything they sell. Update: in FY2014, they sold $89BN ($70.1BN in products, $18.9BN in services), and their cost of sales was $62.8BN. I am pretty sure that their margins are razor-thin in retail, but the service side had higher margins.
- lordnacho 12y agoThe reason they're not making profits as a company is they're spending the money on new projects. That doesn't mean the AWS part is in itself unprofitable. I'd wager it is, given how the business is somewhat mature and they have a huge chunk of that market.
- toomuchtodo 12y agoAWS is hugely profitable: https://gigaom.com/2013/01/07/amazons-cloud-is-bigger-more-profitable-than-we-think-report-says/ https://gigaom.com/2013/01/07/amazons-cloud-is-bigger-more-p...
- rogerbinns 12y agoA Motley Fool article claims that while AWS is successful, it isn't profitable, mainly because of the accounting behind capital expenditure. Last year Amazon spent more in interest than their entire operating income. http://www.fool.com/investing/general/2015/02/04/amazon-just-admitted-that-its-losing-billions.aspx http://www.fool.com/investing/general/2015/02/04/amazon-just...
- karamazov 12y agoIf AWS posts a loss it'll be because Amazon is reinvesting resources into its growth, not because they're subsidizing each user's costs.