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Amazon Finally Discloses Cloud Services Sales, Showing 49% Jump

301 points by T-A 12y ago

pokoleo 12y ago
Judging by the size of the AWS bill that companies pay without a peep, I don't think anyone here is incredibly surprised.
- philip1209 12y ago
  With reserved instances, prepayment, and other tricks you can about halve AWS costs at scale.
  - toomuchtodo 12y ago
    But still get worse performance than bare metal (noisy neighbors, inconsistent EBS performance, intra-instance network latency). Disclaimer: DevOps for AWS and bare metal infrastructure.
    - res0nat0r 12y ago
      Sure, virtualized OS' are always going to have some overhead vs. bare metal.
      - ericd 12y ago
        My understanding is that the OS virtualization is actually a relatively minor part of the difference.
    - nickbauman 12y ago
      Oh yes. Behaving well with a lot of performance variation and continuing to run in a partial failure state is a reality. Cloud makes it an explicit. Your own bare metal makes it implicit. If your app was born in the cloud, it will run that much better when it gets its own home. Until a local catastrophe, of course.
colinbartlett 12y ago
Is there any chance that Amazon might spin off AWS to a separate company? Or would that be suicide to the stock price of their retail business?
- abetaha 12y ago
  The WSJ article seems to hint at that: > The AWS figures allow investors to value what some think could be a spinoff prospect. http://www.wsj.com/articles/amazon-swings-to-loss-despite-jump-in-sales-1429819649 http://www.wsj.com/articles/amazon-swings-to-loss-despite-ju...
- icpmacdo 12y ago
  What is the advantage to spinning it off to its own company?
  - brianwawok 12y ago
    If they think aws growth will slow they can get a big pile of cash to put into their retail or another business.
  - adventured 12y ago
    You do that when the value inside the company is being perpetually vastly under-represented (combined with shareholders applying a lot of pressure to unlock, say, a stagnant stock price). For example, if AWS is worth $100 billion in ten years, and Amazon as a whole is only being valued at $150 billion in the public market at the time. Separate the two might be worth $100 billion each at that point. The argument for eBay spinning off PayPal is this same premise - that PayPal is being undervalued by a lot hiding inside eBay.
    - chatmasta 12y ago
      Amazon is losing money as a whole, but AWS Is profitable. Isn't that the same concept as PayPal hiding in ebay?
      - 12y ago
gshakir 12y ago
I don't think the growth will accelerate as the article claims as the barrier to entry is becoming less and less each day. It should be interesting to see how it plays out.
- hyperliner 12y ago
  There are HUGE barriers to entry. What is the reason behind the "barrier to entry is becoming less and less each day"?
  - joshstrange 12y ago
    Not parent but I'd guess they are talking about OpenStack but if they are they are wrong. Running a data center is no easy or cheap task. Sure you might have SOME of the logistics cut out for you using OpenStack but the barriers to entry are still VERY high.
    - DickingAround 12y ago
      The datacenters is also just part of it. All that software is itself part of the deal. That said, people could build competing services to some AWS products right on top of AWS' own services...
      - alex_anglin 12y ago
        They already do for video streaming and cloud storage, among others probably. Still a nice position for Amazon to be in. FWIW, I've been told that their investment per data center is in the billion dollar range. That capital requirement is definitely a barrier to entry.
    - mblevin 12y ago
      Openstack + spare capacity in a colo facility + a bunch of few years old servers offloaded in a facilities auction and you can build one pretty quickly. Tech isn't the hard part - barriers to get a service up and running are dropping drastically. Hard part is marketing & scaling, and as AWS expands services there are risks from pure-play vendors that do just one slice of the stack 2-3x better than Amazon does.
rifung 12y ago
"Since its inception, Amazon has refined and expanded AWS while competitors including Microsoft and Google have tried to replicate its success with similar projects. Those companies have only recently started to deliver basic services on par with Amazon’s." Is this really true? I know that AWS offers many more services than competitors currently, but for the services for which there is a competing product, is the AWS offering really that much better?
- fweespeech 12y ago
  > is the AWS offering really that much better? Depends on your needs, tbh, traditional hosting is a better fit for mine. I can automate buying and provisioning bare metal servers already. I don't need AWS for that.
  - justincormack 12y ago
    Thats not the question. Yes, AWS is way ahead of the other cloud providers in every way.
    - rifung 12y ago
      Care to elaborate? It seems like you know the answer to my question =] For example, how is EC2 much better than GCE, if it is. (I realize you didn't imply that it was; this comparison just seems the most interesting to me)
      - res0nat0r 12y ago
        "Better" is always relative, it all depends on your workload. AWS have ~40 instances types and and ~40 services they offer, so this is way ahead of other cloud providers, so it is a much richer ecosystem.
    - nickbauman 12y ago
      I spoke with a Google channel lead who said Google's cloud is 5x the size of Amazon's. The policy is not to talk about it publicly because Google itself uses its own cloud tremendously and the 5x size was not something customers necessarily utilize.
mblevin 12y ago
TL;DR on AWS - $1.57b in revenue in Q12015 on $22.72B total ($5B annualized for AWS) - $265m in operating income (net loss for Amazon as a whole was $57m) Looks like revenue was slightly lower but operating income quite a bit higher than most Wall Street estimates.
- usaphp 12y ago
  I just don't understand when people use TL;DR and comment on an article they have not even read.
  - Aldo_MX 12y ago
    It's a way to say "to people not interested in reading the entire article, this is the most important information:"
    - mblevin 12y ago
      Yep - the article itself isn't terrible exciting outside of the core AWS numbers, but this now serves as the place for the HN community to talk about it - because the numbers are what's interesting.
  - spdustin 12y ago
    He was summarizing the "cloud services" relevant points for those for whom the article is "too long, (won't|didn't) read"
trhway 12y ago
in the style of Drake equation: $1.5B/quarter, supposedly 1/3 of it is billed CPU time, at $1/hour per one 1U computer, at 500 hours billed per quarter per computer we have 1M computers - at 40 boxes per rack we have 25K racks, at 50 racks/row it would be 500 rows, at 50 rows per "warehouse" it will be 10 "warehouses". The storage money and racks i'd suppose is comparable to CPU boxes in numbers. So in result it would be 10 "warehouses" of 50 rows of 100 racks.
- late2part 12y ago
  I like your approach, and have some thoughts relevant. What's a computer? The $1/hour revenue is generated by AWS from FAR less than 1U. SuperMicro sells a 2U machine with 4 full sized computers in it with 6 drives. You can put 12 cores in that, and an AWS 'ECU' core is a hyperthreaded core. So, in the Supermicro "quadnode" [1] version you get 4 * 12 * 2 = 96 cores in 2U, or 48 cores per U. An AWS computer/instance that costs $1/hour is a "m2.4xlarge" [2] which has 8 cores. So you can sell 6 "Computers" per U with this math. [1] http://mezz.ixsystems.com/servers/families/?family=Gemini4 http://mezz.ixsystems.com/servers/families/?family=Gemini4 [2] http://www.ec2instances.info/ http://www.ec2instances.info/
  - trhway 12y ago
    > SuperMicro sells a 2U machine with 4 full sized computers in it with 6 drives. You can put 12 cores in that i don't think AMZN or Google put 4 sockets per 1 U. While obviously it is possible, it would be pretty dense for normally powered chips. My understanding is that 2 socket/1U is more typical. At 100W/chip it would be a difference between 8KW and 16KW heat from a rack. But anyway, you're right - AMZN probably gets more than $1/1U. Their cluster 2-socket (16 real, 32 v-cores) instances go for $3.5/hour. Starting from that number we can adjust it down somewhat for pre-paid/reserved/spot pricing. Anyway, lets hope fuzziness in one number is compensated (not amplified :) by fuzziness in another ... Actually from the 2013 link you posted in the response below (that one - https://storageservers.wordpress.com/2013/07/17/facts-and-stats-of-worlds-largest-data-centers/ https://storageservers.wordpress.com/2013/07/17/facts-and-st...): "Amazon data center- Amazon has around 450,000 servers in its data centers sited in 7 locations in the world. " So adjusting for 1+ years of growth (of at least 10-20% as they had 49% revenue increase) my original estimate was less than 2 times wrong :) Edit: actually adding storage servers - may be up to 4 times wrong if they have all 1U servers, so the most probable parameter to adjust would be $/1U to something like $2+/1U.
MovingWorlds 12y ago
Interesting to see the after hour stock price jump.... https://www.google.com/finance?q=NASDAQ%3AAMZN&ei=HXA5VcnWBYSwiQLU2oHQBw https://www.google.com/finance?q=NASDAQ%3AAMZN&ei=HXA5VcnWBY...
- Kurtz79 12y ago
  Especially if you hold some shares :) I thought that the potential profits of cloud business were already being factored in the current evaluation, but apparently it was more profitable than the analysts (which were probably imagining the same thin margins as the retail business) expected.
quizotic 12y ago
Does anyone have insight into AWS revenue per service? Does EC2 generate the bulk of the revenue? Is Lambda the fastest growth area? How is Redshift doing?
- mentat 12y ago
  I'm sure Amazon knows and, since this is the first aggregate disclosure, that there's no way they're going to state publicly.
chatmasta 12y ago
"These have since become common building blocks of Internet-based computing systems, supporting companies ranging from large enterprises like Infor US Inc. and Netflix Inc. to startups such as Instacart Inc." When I see a brand name mentioned randomly in an arricle, I wonder who paid for it. Why would Bloomberg mention instacart specifically? Is it common practice for companies to pay for these subtle pseudo-mentions in articles?
- mblevin 12y ago
  Not paid directly - it's a combination of 1) brands being top of mind 2) what people / robots will recognize and ever so likely potentially to share or what will have the tiniest bit of extra SEO juice. #1 only comes from a lot of ongoing PR outreach, coffee chats, briefings, etc - which takes time and $$$$ usually via an agency working nonstop on developing relationships to keep a brand top of mind for side mentions like this and to be at the top of the rolodex when a reporter needs a quote or some help understanding an industry or technology space.
  - mattzito 12y ago
    It's also entirely possible that the reporter either asked AWS for some customer names and cherry-picked those, or the reporter asked their network for some names. In my experience, it's not paid other than in really shady non-mainstream media sites.
    - onewaystreet 12y ago
      It's an interesting question because many more well know startups use AWS (Airbnb, Pinterest, Etsy, Spotify). Amazon has a webpage specifically to highlight them: http://aws.amazon.com/start-ups/ http://aws.amazon.com/start-ups/. It's hard to imagine that Instacart would be the startup that would be offered as an example by Amazon or the reporter's network. It wouldn't surprise me if reporter was friends with the founders.
- jstoiko 12y ago
  You just did the same thing :)
akg_67 12y ago
This article shows relative "cloud" revenues numbers between Amazon, IBM, Microsoft, and Google. In this context, Amazon doesn't look that big. http://finance.yahoo.com/news/official-amazon-strongest-cloud-business-204718694.html http://finance.yahoo.com/news/official-amazon-strongest-clou...
- nullrouted 12y ago
  Pretty unfair comparison in that article. Microsoft including Office 365 and Dynamics in that number totally masks Azure revenue. It would be a more fair comparison to see AWS vs Azure vs GCC.
- shakethemonkey 12y ago
  That article doesn't support your point, except perhaps for IBM and it's hazy to me what exactly that revenue is. It's certainly not from the type of developer-targeted infrastructure services that AWS is. As for Microsoft, quoting directly from your link: "One person has told Business Insider that Azure revenue is at $1 billion lifetime since its debut in 2011, but is accelerating quickly."
  - sokoloff 12y ago
    IBM owns Softlayer in addition to internally developed services.
techtivist 12y ago
With such slim margins AWS and the larger cloud services industry of today will become what the airlines industry has become.
- late2part 12y ago
  16% contributory profit is not a slim margin. AWS made a quarter-billion profit on 1.67 gross revenue. That's better than 80% of the industries, beating brokerages, beverages, and pharmaceuticals, according to this NYU study here: http://pages.stern.nyu.edu/~adamodar/New_Home_Page/datafile/margin.html http://pages.stern.nyu.edu/~adamodar/New_Home_Page/datafile/...
- discodave 12y ago
  The barriers for entry to Cloud are actually higher than for airlines IMO. In the long run it will become more like the utility industry (think electricity) than airlines. To get into the same cloud market as AMZN/MSFT/GOOG you are going to need: 1. Several billion dollars of Capex to get to the same scale as the incumbents. 2. A large amount of investment to replicate all the internal software that Amazon and friends have. 3. Goodwill from startups and/or enterprise CIO types. Getting into the airline business is comparatively easy: 1. You lease the planes from Boeing or Airbus. 2. Pilots and other staff are highly skilled but otherwise fungible. 3. Marketing through traditional consumer channels and price comparison engines is very well understood and if you're willing to eat the losses then growing share is doable.
  - fragmede 12y ago
    Getting into the cloud, and getting into the cloud on the same level as Amazon, Microsoft, or Google are two different things. Just like getting into the airline business, and getting into the airline business to compete with the likes of American Airlines, Lufthansa or United Airlines are two different things. The same overly simplistic business plan could just as easily be applied to 'getting into Cloud', and while leasing a few business jets off Boeing has it's own page on boeing.com[1], it's still a significant expenditure. Here's the same plan: 1. Lease a pile of servers from Dell or HP 2. Developers, Sysadmins, and other staff are highly skilled but otherwise fungible. OpenStack is rapidly maturing so you can take advantage of that. 3. Marketing, marketing, marketing. Through newer online social media channels instead and compete on price. Airlines are famous for making only meager profits, especially considering the capex required to play. Since Cloud is still a relatively immature industry, there's still room for niches, just like the airline industry has regional airlines. All GPU cluster anybody? Bare-metal Private Servers? Digital Ocean and Rackspace are chugging along just fine. How about selling of Cloud services that run on top of AWS? Is that still Cloud? Dropbox famously started off just running on top of Amazon's S3, and I'd definitely call them Cloud. How about if you setup Heroku for Erlang? Scala? No billion dollars of Capex required, and I'd still definitely call Heroku a Cloud business. Trying to compete with the likes of Amazon, Microsoft, or Google without billions of dollars is tilting against windmills, but to say 'getting into cloud' requires several billion dollars at the outset is a bit of an overstatement. [1] http://www.boeing.com/company/about-bca/startupboeing.page http://www.boeing.com/company/about-bca/startupboeing.page
allworknoplay 12y ago
Jesus, I'm occasionally amazed at GAAP for not requiring breakout of a business unit as large as $6 billion (last quarter obviously somewhat less) simply because the overall company is comparatively large; especially so when the profitability of the unit is so different from the overall company. Seems fucking material to me.
- adventured 12y ago
  I believe that's why Amazon went ahead with it. If you don't run into SEC requirements, you run into aggressive shareholders that will cause you legal problems trying to force you to reveal the value of such an enterprise. Suddenly Carl Icahn is breathing down your neck trying to get you to reveal that info, so they can judge if it should be spun off. The shareholder risk becomes immense the larger a business like that gets without breaking out any financial information on it.
  - allworknoplay 12y ago
    I think you're correct, it probably just hit 5%. I'm just honestly amazed given the lack of transparency and risk in super gigantic corporations that there isn't an absolute dollar threshold for lines of business as well as a percentage one.
- tim333 12y ago
  It would be hard to mandate as how would you define a business unit? If amazon just sold books would fiction and non fiction count as different units or do book sales and electrical? There a different ways you can slice a business.
  - allworknoplay 12y ago
    It's actually not difficult at all; there are already materiality rules (in the case of revenue disclosures, they're stated in percentages), and it's fraud to break them. You could just define material by both absolute dollars and also percentages.
Lightbody 12y ago
Consider that their revenue is about the same as what Salesforce (CRM) will likely report (based on analyst estimates). This is pretty impressive: - Q1 2015 revenue: $1.57B (AWS) vs ~$1.5B (CRM) - Q1 2014 revenue: $1.05B vs $1.23B - Q1 YoY change: 49% vs ~22% - Q1 2015 operating income: 16.9% vs (~3%) - Q1 2014 operating income: 23.3% vs (4.5%) Basically for all the talk that Amazon is a low-margin, commodity business that will never make money, their AWS business at least is doing really well. I'm not taking anything away from Salesforce, it just happens to be a similarly sized comparison that most people thinks is a pretty good business. When compared, AWS looks pretty great!
- kokey 12y ago
  It also means Amazon has massive room to shrink margin to stay competitive.
ChuckMcM 12y ago
5 billion dollars a year. That is pretty impressive. Compared that to a company like Google that can't make any money at all off their infrastructure except with search ads[1] :-) That is the real story for me. And a tiny bit personal because when I was there I didn't feel that platforms got nearly the respect they deserved for keeping the roads rolling. Congratulations to the Amazon team, that is an impressive feat indeed. [1] http://investor.google.com/earnings/2015/Q1_google_earnings.html http://investor.google.com/earnings/2015/Q1_google_earnings....
- aleem 12y ago
  It's even more impressive when you consider his statement: > “Amazon Web Services is a $5 billion business and still growing fast -- in fact it’s accelerating,” I take that to mean that the business is growing but the rate of growth is also growing (hence "accelerating"; I like how he puts it so succinctly).
  - turingbook 12y ago
    The rate is not growing: 2015Q1 49%, 2014Q1 69%.
    - adwhit 12y ago
      > “Amazon Web Services is a $5 billion business and still growing fast -- in fact it’s accelerating, Revenue 2013: $1000 Revenue 2014: $1690 (+ $690) Revenue 2015: $2518 (+ $828) With those figures you could still argue that growth (in terms of extra revenue per year) is accelerating.
      - dangerboysteve 12y ago
        Still even more impressive is AWS keeps dropping prices year after year and has impressive revenue growth.
snambi 12y ago
Very Impressive
growthape 12y ago
I believe this happened because companies like http://www.cloudways.com/en/ http://www.cloudways.com/en/ are integrating Amazon cloud infrastructure smartly to build a service for application developers. Usually, application developers are not good at server side configurations. They want something that's easy to setup and help them deploy their applications like WordPress, Magento, Drupal, Joomla etc. Companies like Cloudways are taking away a lot of pain and giving those application developers a chance to easily setup their apps with premium support. Don't you think that's attractive? and a business opportunity as well.
- getsat 12y ago
  Shillways. Your comment history is amusing.
prirun 12y ago
An alternate view: http://market-ticker.org/akcs-www?post=230060 http://market-ticker.org/akcs-www?post=230060

301 points by T-A 12y ago

Judging by the size of the AWS bill that companies pay without a peep, I don't think anyone here is incredibly surprised.

philip1209 12y ago
With reserved instances, prepayment, and other tricks you can about halve AWS costs at scale.
- toomuchtodo 12y ago
  But still get worse performance than bare metal (noisy neighbors, inconsistent EBS performance, intra-instance network latency). Disclaimer: DevOps for AWS and bare metal infrastructure.
  - res0nat0r 12y ago
    Sure, virtualized OS' are always going to have some overhead vs. bare metal.
    - ericd 12y ago
      My understanding is that the OS virtualization is actually a relatively minor part of the difference.
  - nickbauman 12y ago
    Oh yes. Behaving well with a lot of performance variation and continuing to run in a partial failure state is a reality. Cloud makes it an explicit. Your own bare metal makes it implicit. If your app was born in the cloud, it will run that much better when it gets its own home. Until a local catastrophe, of course.

colinbartlett 12y ago

Is there any chance that Amazon might spin off AWS to a separate company? Or would that be suicide to the stock price of their retail business?

abetaha 12y ago
The WSJ article seems to hint at that: > The AWS figures allow investors to value what some think could be a spinoff prospect. http://www.wsj.com/articles/amazon-swings-to-loss-despite-jump-in-sales-1429819649 http://www.wsj.com/articles/amazon-swings-to-loss-despite-ju...
icpmacdo 12y ago
What is the advantage to spinning it off to its own company?
- brianwawok 12y ago
  If they think aws growth will slow they can get a big pile of cash to put into their retail or another business.
- adventured 12y ago
  You do that when the value inside the company is being perpetually vastly under-represented (combined with shareholders applying a lot of pressure to unlock, say, a stagnant stock price). For example, if AWS is worth $100 billion in ten years, and Amazon as a whole is only being valued at $150 billion in the public market at the time. Separate the two might be worth $100 billion each at that point. The argument for eBay spinning off PayPal is this same premise - that PayPal is being undervalued by a lot hiding inside eBay.
  - chatmasta 12y ago
    Amazon is losing money as a whole, but AWS Is profitable. Isn't that the same concept as PayPal hiding in ebay?
    - 12y ago

gshakir 12y ago

I don't think the growth will accelerate as the article claims as the barrier to entry is becoming less and less each day. It should be interesting to see how it plays out.

hyperliner 12y ago
There are HUGE barriers to entry. What is the reason behind the "barrier to entry is becoming less and less each day"?
- joshstrange 12y ago
  Not parent but I'd guess they are talking about OpenStack but if they are they are wrong. Running a data center is no easy or cheap task. Sure you might have SOME of the logistics cut out for you using OpenStack but the barriers to entry are still VERY high.
  - DickingAround 12y ago
    The datacenters is also just part of it. All that software is itself part of the deal. That said, people could build competing services to some AWS products right on top of AWS' own services...
    - alex_anglin 12y ago
      They already do for video streaming and cloud storage, among others probably. Still a nice position for Amazon to be in. FWIW, I've been told that their investment per data center is in the billion dollar range. That capital requirement is definitely a barrier to entry.
  - mblevin 12y ago
    Openstack + spare capacity in a colo facility + a bunch of few years old servers offloaded in a facilities auction and you can build one pretty quickly. Tech isn't the hard part - barriers to get a service up and running are dropping drastically. Hard part is marketing & scaling, and as AWS expands services there are risks from pure-play vendors that do just one slice of the stack 2-3x better than Amazon does.

rifung 12y ago

"Since its inception, Amazon has refined and expanded AWS while competitors including Microsoft and Google have tried to replicate its success with similar projects. Those companies have only recently started to deliver basic services on par with Amazon’s." Is this really true? I know that AWS offers many more services than competitors currently, but for the services for which there is a competing product, is the AWS offering really that much better?

fweespeech 12y ago
> is the AWS offering really that much better? Depends on your needs, tbh, traditional hosting is a better fit for mine. I can automate buying and provisioning bare metal servers already. I don't need AWS for that.
- justincormack 12y ago
  Thats not the question. Yes, AWS is way ahead of the other cloud providers in every way.
  - rifung 12y ago
    Care to elaborate? It seems like you know the answer to my question =] For example, how is EC2 much better than GCE, if it is. (I realize you didn't imply that it was; this comparison just seems the most interesting to me)
    - res0nat0r 12y ago
      "Better" is always relative, it all depends on your workload. AWS have ~40 instances types and and ~40 services they offer, so this is way ahead of other cloud providers, so it is a much richer ecosystem.
  - nickbauman 12y ago
    I spoke with a Google channel lead who said Google's cloud is 5x the size of Amazon's. The policy is not to talk about it publicly because Google itself uses its own cloud tremendously and the 5x size was not something customers necessarily utilize.

mblevin 12y ago

TL;DR on AWS - $1.57b in revenue in Q12015 on $22.72B total ($5B annualized for AWS) - $265m in operating income (net loss for Amazon as a whole was $57m) Looks like revenue was slightly lower but operating income quite a bit higher than most Wall Street estimates.

usaphp 12y ago
I just don't understand when people use TL;DR and comment on an article they have not even read.
- Aldo_MX 12y ago
  It's a way to say "to people not interested in reading the entire article, this is the most important information:"
  - mblevin 12y ago
    Yep - the article itself isn't terrible exciting outside of the core AWS numbers, but this now serves as the place for the HN community to talk about it - because the numbers are what's interesting.
- spdustin 12y ago
  He was summarizing the "cloud services" relevant points for those for whom the article is "too long, (won't|didn't) read"

trhway 12y ago

in the style of Drake equation: $1.5B/quarter, supposedly 1/3 of it is billed CPU time, at $1/hour per one 1U computer, at 500 hours billed per quarter per computer we have 1M computers - at 40 boxes per rack we have 25K racks, at 50 racks/row it would be 500 rows, at 50 rows per "warehouse" it will be 10 "warehouses". The storage money and racks i'd suppose is comparable to CPU boxes in numbers. So in result it would be 10 "warehouses" of 50 rows of 100 racks.

late2part 12y ago
I like your approach, and have some thoughts relevant. What's a computer? The $1/hour revenue is generated by AWS from FAR less than 1U. SuperMicro sells a 2U machine with 4 full sized computers in it with 6 drives. You can put 12 cores in that, and an AWS 'ECU' core is a hyperthreaded core. So, in the Supermicro "quadnode" [1] version you get 4 * 12 * 2 = 96 cores in 2U, or 48 cores per U. An AWS computer/instance that costs $1/hour is a "m2.4xlarge" [2] which has 8 cores. So you can sell 6 "Computers" per U with this math. [1] http://mezz.ixsystems.com/servers/families/?family=Gemini4 http://mezz.ixsystems.com/servers/families/?family=Gemini4 [2] http://www.ec2instances.info/ http://www.ec2instances.info/
- trhway 12y ago
  > SuperMicro sells a 2U machine with 4 full sized computers in it with 6 drives. You can put 12 cores in that i don't think AMZN or Google put 4 sockets per 1 U. While obviously it is possible, it would be pretty dense for normally powered chips. My understanding is that 2 socket/1U is more typical. At 100W/chip it would be a difference between 8KW and 16KW heat from a rack. But anyway, you're right - AMZN probably gets more than $1/1U. Their cluster 2-socket (16 real, 32 v-cores) instances go for $3.5/hour. Starting from that number we can adjust it down somewhat for pre-paid/reserved/spot pricing. Anyway, lets hope fuzziness in one number is compensated (not amplified :) by fuzziness in another ... Actually from the 2013 link you posted in the response below (that one - https://storageservers.wordpress.com/2013/07/17/facts-and-stats-of-worlds-largest-data-centers/ https://storageservers.wordpress.com/2013/07/17/facts-and-st...): "Amazon data center- Amazon has around 450,000 servers in its data centers sited in 7 locations in the world. " So adjusting for 1+ years of growth (of at least 10-20% as they had 49% revenue increase) my original estimate was less than 2 times wrong :) Edit: actually adding storage servers - may be up to 4 times wrong if they have all 1U servers, so the most probable parameter to adjust would be $/1U to something like $2+/1U.

MovingWorlds 12y ago

Interesting to see the after hour stock price jump.... https://www.google.com/finance?q=NASDAQ%3AAMZN&ei=HXA5VcnWBYSwiQLU2oHQBw https://www.google.com/finance?q=NASDAQ%3AAMZN&ei=HXA5VcnWBY...

Kurtz79 12y ago
Especially if you hold some shares :) I thought that the potential profits of cloud business were already being factored in the current evaluation, but apparently it was more profitable than the analysts (which were probably imagining the same thin margins as the retail business) expected.

quizotic 12y ago

Does anyone have insight into AWS revenue per service? Does EC2 generate the bulk of the revenue? Is Lambda the fastest growth area? How is Redshift doing?

mentat 12y ago
I'm sure Amazon knows and, since this is the first aggregate disclosure, that there's no way they're going to state publicly.

chatmasta 12y ago

"These have since become common building blocks of Internet-based computing systems, supporting companies ranging from large enterprises like Infor US Inc. and Netflix Inc. to startups such as Instacart Inc." When I see a brand name mentioned randomly in an arricle, I wonder who paid for it. Why would Bloomberg mention instacart specifically? Is it common practice for companies to pay for these subtle pseudo-mentions in articles?

mblevin 12y ago
Not paid directly - it's a combination of 1) brands being top of mind 2) what people / robots will recognize and ever so likely potentially to share or what will have the tiniest bit of extra SEO juice. #1 only comes from a lot of ongoing PR outreach, coffee chats, briefings, etc - which takes time and $$$$ usually via an agency working nonstop on developing relationships to keep a brand top of mind for side mentions like this and to be at the top of the rolodex when a reporter needs a quote or some help understanding an industry or technology space.
- mattzito 12y ago
  It's also entirely possible that the reporter either asked AWS for some customer names and cherry-picked those, or the reporter asked their network for some names. In my experience, it's not paid other than in really shady non-mainstream media sites.
  - onewaystreet 12y ago
    It's an interesting question because many more well know startups use AWS (Airbnb, Pinterest, Etsy, Spotify). Amazon has a webpage specifically to highlight them: http://aws.amazon.com/start-ups/ http://aws.amazon.com/start-ups/. It's hard to imagine that Instacart would be the startup that would be offered as an example by Amazon or the reporter's network. It wouldn't surprise me if reporter was friends with the founders.
jstoiko 12y ago
You just did the same thing :)

akg_67 12y ago

This article shows relative "cloud" revenues numbers between Amazon, IBM, Microsoft, and Google. In this context, Amazon doesn't look that big. http://finance.yahoo.com/news/official-amazon-strongest-cloud-business-204718694.html http://finance.yahoo.com/news/official-amazon-strongest-clou...

nullrouted 12y ago
Pretty unfair comparison in that article. Microsoft including Office 365 and Dynamics in that number totally masks Azure revenue. It would be a more fair comparison to see AWS vs Azure vs GCC.
shakethemonkey 12y ago
That article doesn't support your point, except perhaps for IBM and it's hazy to me what exactly that revenue is. It's certainly not from the type of developer-targeted infrastructure services that AWS is. As for Microsoft, quoting directly from your link: "One person has told Business Insider that Azure revenue is at $1 billion lifetime since its debut in 2011, but is accelerating quickly."
- sokoloff 12y ago
  IBM owns Softlayer in addition to internally developed services.

techtivist 12y ago

With such slim margins AWS and the larger cloud services industry of today will become what the airlines industry has become.

late2part 12y ago
16% contributory profit is not a slim margin. AWS made a quarter-billion profit on 1.67 gross revenue. That's better than 80% of the industries, beating brokerages, beverages, and pharmaceuticals, according to this NYU study here: http://pages.stern.nyu.edu/~adamodar/New_Home_Page/datafile/margin.html http://pages.stern.nyu.edu/~adamodar/New_Home_Page/datafile/...
discodave 12y ago
The barriers for entry to Cloud are actually higher than for airlines IMO. In the long run it will become more like the utility industry (think electricity) than airlines. To get into the same cloud market as AMZN/MSFT/GOOG you are going to need: 1. Several billion dollars of Capex to get to the same scale as the incumbents. 2. A large amount of investment to replicate all the internal software that Amazon and friends have. 3. Goodwill from startups and/or enterprise CIO types. Getting into the airline business is comparatively easy: 1. You lease the planes from Boeing or Airbus. 2. Pilots and other staff are highly skilled but otherwise fungible. 3. Marketing through traditional consumer channels and price comparison engines is very well understood and if you're willing to eat the losses then growing share is doable.
- fragmede 12y ago
  Getting into the cloud, and getting into the cloud on the same level as Amazon, Microsoft, or Google are two different things. Just like getting into the airline business, and getting into the airline business to compete with the likes of American Airlines, Lufthansa or United Airlines are two different things. The same overly simplistic business plan could just as easily be applied to 'getting into Cloud', and while leasing a few business jets off Boeing has it's own page on boeing.com[1], it's still a significant expenditure. Here's the same plan: 1. Lease a pile of servers from Dell or HP 2. Developers, Sysadmins, and other staff are highly skilled but otherwise fungible. OpenStack is rapidly maturing so you can take advantage of that. 3. Marketing, marketing, marketing. Through newer online social media channels instead and compete on price. Airlines are famous for making only meager profits, especially considering the capex required to play. Since Cloud is still a relatively immature industry, there's still room for niches, just like the airline industry has regional airlines. All GPU cluster anybody? Bare-metal Private Servers? Digital Ocean and Rackspace are chugging along just fine. How about selling of Cloud services that run on top of AWS? Is that still Cloud? Dropbox famously started off just running on top of Amazon's S3, and I'd definitely call them Cloud. How about if you setup Heroku for Erlang? Scala? No billion dollars of Capex required, and I'd still definitely call Heroku a Cloud business. Trying to compete with the likes of Amazon, Microsoft, or Google without billions of dollars is tilting against windmills, but to say 'getting into cloud' requires several billion dollars at the outset is a bit of an overstatement. [1] http://www.boeing.com/company/about-bca/startupboeing.page http://www.boeing.com/company/about-bca/startupboeing.page

allworknoplay 12y ago

Jesus, I'm occasionally amazed at GAAP for not requiring breakout of a business unit as large as $6 billion (last quarter obviously somewhat less) simply because the overall company is comparatively large; especially so when the profitability of the unit is so different from the overall company. Seems fucking material to me.

adventured 12y ago
I believe that's why Amazon went ahead with it. If you don't run into SEC requirements, you run into aggressive shareholders that will cause you legal problems trying to force you to reveal the value of such an enterprise. Suddenly Carl Icahn is breathing down your neck trying to get you to reveal that info, so they can judge if it should be spun off. The shareholder risk becomes immense the larger a business like that gets without breaking out any financial information on it.
- allworknoplay 12y ago
  I think you're correct, it probably just hit 5%. I'm just honestly amazed given the lack of transparency and risk in super gigantic corporations that there isn't an absolute dollar threshold for lines of business as well as a percentage one.
tim333 12y ago
It would be hard to mandate as how would you define a business unit? If amazon just sold books would fiction and non fiction count as different units or do book sales and electrical? There a different ways you can slice a business.
- allworknoplay 12y ago
  It's actually not difficult at all; there are already materiality rules (in the case of revenue disclosures, they're stated in percentages), and it's fraud to break them. You could just define material by both absolute dollars and also percentages.

Lightbody 12y ago

Consider that their revenue is about the same as what Salesforce (CRM) will likely report (based on analyst estimates). This is pretty impressive: - Q1 2015 revenue: $1.57B (AWS) vs ~$1.5B (CRM) - Q1 2014 revenue: $1.05B vs $1.23B - Q1 YoY change: 49% vs ~22% - Q1 2015 operating income: 16.9% vs (~3%) - Q1 2014 operating income: 23.3% vs (4.5%) Basically for all the talk that Amazon is a low-margin, commodity business that will never make money, their AWS business at least is doing really well. I'm not taking anything away from Salesforce, it just happens to be a similarly sized comparison that most people thinks is a pretty good business. When compared, AWS looks pretty great!

kokey 12y ago
It also means Amazon has massive room to shrink margin to stay competitive.

ChuckMcM 12y ago

5 billion dollars a year. That is pretty impressive. Compared that to a company like Google that can't make any money at all off their infrastructure except with search ads[1] :-) That is the real story for me. And a tiny bit personal because when I was there I didn't feel that platforms got nearly the respect they deserved for keeping the roads rolling. Congratulations to the Amazon team, that is an impressive feat indeed. [1] http://investor.google.com/earnings/2015/Q1_google_earnings.html http://investor.google.com/earnings/2015/Q1_google_earnings....

aleem 12y ago
It's even more impressive when you consider his statement: > “Amazon Web Services is a $5 billion business and still growing fast -- in fact it’s accelerating,” I take that to mean that the business is growing but the rate of growth is also growing (hence "accelerating"; I like how he puts it so succinctly).
- turingbook 12y ago
  The rate is not growing: 2015Q1 49%, 2014Q1 69%.
  - adwhit 12y ago
    > “Amazon Web Services is a $5 billion business and still growing fast -- in fact it’s accelerating, Revenue 2013: $1000 Revenue 2014: $1690 (+ $690) Revenue 2015: $2518 (+ $828) With those figures you could still argue that growth (in terms of extra revenue per year) is accelerating.
    - dangerboysteve 12y ago
      Still even more impressive is AWS keeps dropping prices year after year and has impressive revenue growth.

snambi 12y ago

Very Impressive

growthape 12y ago

I believe this happened because companies like http://www.cloudways.com/en/ http://www.cloudways.com/en/ are integrating Amazon cloud infrastructure smartly to build a service for application developers. Usually, application developers are not good at server side configurations. They want something that's easy to setup and help them deploy their applications like WordPress, Magento, Drupal, Joomla etc. Companies like Cloudways are taking away a lot of pain and giving those application developers a chance to easily setup their apps with premium support. Don't you think that's attractive? and a business opportunity as well.

getsat 12y ago
Shillways. Your comment history is amusing.

prirun 12y ago

An alternate view: http://market-ticker.org/akcs-www?post=230060 http://market-ticker.org/akcs-www?post=230060