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Amazon Web Services revenue rises 81% year over year
- gargarplex 11y agoI think it will only continue to grow (for the next 5 years).
- Fratercula 11y agonow thats some nice growth!
- foobar2020 11y agoThe entire cloud is growing at a similar rate. Comparing market shares seems more reasonable at this point: https://www.srgresearch.com/articles/aws-market-share-reaches-five-year-high-despite-microsoft-growth-surge https://www.srgresearch.com/articles/aws-market-share-reache...
- sker 11y agoInteresting that it rose about the same amount as Microsoft's cloud revenue which was around 90%. Anyone has numbers for Google?
- foobar2020 11y agoSeems like Google does not like to share details on a regular basis: http://fortune.com/2015/04/24/google-cloud-numbers/ http://fortune.com/2015/04/24/google-cloud-numbers/ Side note: numbers between Microsoft and Amazon are not directly comparable because Microsoft includes SaaS solutions such as Office 365 in their cloud revenue. So it is not Azure versus AWS.
- fnayr 11y ago36% of Amazon's operating profit is now from AWS. That's crazy!
- artursapek 11y agoThat is crazy. AWS revenue is nothing compared to their total revenue, right?
- dangrossman 11y agoAWS contributed $1.82B of the $23.18B in total revenue for the quarter.
- guelo 11y agoThat's way more significant than I would have expected. Still, 8% of their revenue contributes 36% of their profits. Makes you wonder why they don't run AWS at the same cutthroat prices as their other businesses.
- deleted 11y ago[deleted]
- NhanH 11y agoAmazon retailer still have competitors coming behind their back, albeit at a distance, but Walmart & co. is nothing to sneeze at. AWS have about ... zero competition where they are right now. Google CLoud, Azure and the like are not doing quite the same thing just yet.
- thoman23 11y agoAgreed, but Amazon as a retail operation is so well run with such excellent customer service it's hard to imagine Walmart outcompeting them.
- jjoonathan 11y agoWalmart is cheaper. Significantly cheaper. You don't have to pay $100-$300 per year plus Amazon's typical 10-20% price premium* in exchange for "free" 2-day shipping. If you live in the right place you can pick up the goods same-day from Walmart, maybe even on your commute, so for some people it's more convenient too. * The usual caveat about everything varying with geography applies here too, I'm sure.
- afarrell 11y agoI wonder how much of that is people forgetting to shut down unused EC2 instances
- tootie 11y agoI think you'd remember when you get the bill.
- w-ll 11y agoExcept you don't get a bill, you get a receipt that gets buried in tons of junk mail. And as I reply to this, I decided to check my AWS console, because there is an instance for the life of me I can't terminate.
- toomuchtodo 11y agoHave you tried changing regions in the console?
- thoman23 11y agoAgreed on this advice. When I was new to AWS I kept receiving a bill for a few cents that obviously wasn't worth my time to resolve, but still really irritated my why I couldn't find a running instance. Turns out the running instance was in a different region and I didn't know the EC2 server list displayed only one region at a time.
- res0nat0r 11y agoIf you have the aws cli tool installed this will list all of your instances and their public IP addresses in all regions for you: for region in `aws ec2 describe-regions | awk '{print $NF}'`; do echo $region; aws ec2 describe-instances --region $region --query 'Reservations[].Instances[].[[Tags[?Key==`Name`]| [0].Value], PublicIpAddress]'; echo ; done
- click170 11y ago
- brwnll 11y agoThe drop in operating profit from Q1 to Q2 2014 of about 50% (~$100m) made me look into some of their acquisitions being made for AWS. Might be able to get more clarity into what they are paying for these undisclosed acquisitions prices, assuming their cost for constructing data farms stays relatively constant. - Peritor (Ops, Mar 2013) - ClusterK (Apr 2014, $20M-$50M) - Amiato (NoSQL, May 2014) - 2lemetry (IoT, Mar 2014) - Annapurna Labs (Jan 2015, ~$370M) - AppThwack (Mobile testing, Jul 2015)
- jasondc 11y agoIt's only a matter of time before they split AWS from Amazon, just wondering why they're waiting so long.
- airza 11y agoWhy would they? Amazon is a platform company.
- tootie 11y agoI'm waiting for Amazon Prime to start bundling server time.
- jon-wood 11y agoThat would only make sense for a very small portion of their users, and confuse a great many. I think the more likely path is going to be services like their photo library, which can clearly make use of AWS, but doesn't directly expose it to customers. I could see some sort of backup service happening in the near future, and someone else mentioned Echo.
- tootie 11y agoThat's never stopped them before.
- thrownaway2424 11y agoWhy _don't_ they do this?
- kryptiskt 11y agoMaybe they should split the retail business from Amazon instead.
- tomphoolery 11y agoThat doesn't make sense. AWS allows Amazon (the retail store) to go very deep into the red and the entire company could still be afloat. There's no reason to distance yourself from the most profitable part of your company.
- x0x0 11y agoBut is it even profitable? Operating profits don't include capex. And data centers full of xeons are expensive.
- sokoloff 11y agoOperating profits take a charge for depreciation of capital assets over the (tax) economic life of the asset. So, AWS is charged between 1/36 and 1/60th of the value of the server per month for 36 or 60 months. (Exact schedule of depreciation is facts and circumstances dependent.) But it's not like they're making a profit just because the servers are "free". Source: I ran tech ops for an e-commerce company you've likely heard of for ~half a decade.
- x0x0 11y agoThey could well be making that profit exactly because servers are free. AWS operating profit q2: $400m, for a $1.6B/year run rate. A fascinating post from Benedict Evans looks at Amazon's capex/sales ratio from 2009 and looks at what free cash flow would have been had Amazon preserved that ratio through 2014 instead of incurring massive capex. They would have had another $5B over the year previous to that article. [1] Obviously some of that is warehouses, but unless they speak to how much of that is datacenters, I don't see how anyone can assume aws is actually profitable. [1] http://ben-evans.com/benedictevans/2014/9/4/why-amazon-has-no-profits-and-why-it-works http://ben-evans.com/benedictevans/2014/9/4/why-amazon-has-n...
- sokoloff 11y agoThere is a well understood (and "generally accepted" [GAAP]) formula for operating profits: Operating Profit = Operating Revenue - COGS - Operating Expenses - Depreciation & Amortization AWS Q2 conf call slides: http://phx.corporate-ir.net/External.File?item=UGFyZW50SUQ9Mjk2MTUxfENoaWxkSUQ9LTF8VHlwZT0z&t=1&cb=635732807364984824 http://phx.corporate-ir.net/External.File?item=UGFyZW50SUQ9M... You can see on slide 15 "Segment Results-AWS" that the segment profit for Q2 was $391MM on net AWS sales of $1.842BB. Both numbers are for the quarter. The article you linked talks about FCF, not operating income, and free cash flow is still hit with, in Amazon's case, what appears to be capital lease payments. (See slides 21 and 22 for the FCF reconciliation for newly acquired capital equipment, which they don't break out at the segment level.) E&Y audits Amazon's financials. I'm not sure what evidence you have to suggest that Amazon is improperly "not counting" server expenses in AWS profitability numbers, but that would be an extraordinary claim, which would require some substantial evidence to overcome the presumption that E&Y and Amazon finance are correctly reporting. It is true that E&Y has not signed a full-year audit for a year when AWS broke out AWS P&L separately, as that only happened for two quarters so far.
- downandout 11y agoI'm trying to understand why large companies use AWS for their primary infrastructure. Both AWS and Azure are obscenely expensive when compared to buying servers and colocating them somewhere. The cloud model works well for bootstrapped startups, but anyone with the resources to buy and manage their own servers is crazy if they use AWS or Azure as their primary server platform.
- jon-wood 11y agoI feel like this is a myth that just won't go away. If you run your 24/7 steady state load using on-demand hourly charged instances, and don't factor in the cost of managing your own hardware and data centres then yes, EC2 is hideously expensive. If you plan your spend (much like you would in buying your own hardware and DC space) it really isn't - reserved instances considerably reduce prices, and come with bulk discounts when you buy enough of them. It's been a while, but when costing out our migration to EC2 it came out cheaper than any other VM provider, and was in the same ballpark as leasing our own hardware.
- nulltype 11y agoWhat about bandwidth costs?
- jon-wood 11y agoFrankly, they're a rounding error with our current workload. If you're in the business of running a CDN or streaming video you may want to look at other options - Netflix with their caching servers in ISP's data centres are a pretty good example of this.
- lostcolony 11y agoIs it? Cloud providers bring you not just localized infrastructure, but distributed infrastructure, with clear mechanisms for scaling as needed, plus support, etc. With AWS, you have a predictable cost, predictable up-time, and ability to scale at peak, and your costs are spread over time, rather than all up front. With your own servers you have to build out to handle peak load (and run mostly dormant during non-peak hours), across multiple locations, to achieve the same availability. I'm not sure the costs for the convenience of AWS are so obscene in such a case. They may still be higher, I honestly don't know, but the convenience benefit is huge. They key bit is that AWS' costs are largely -known-, whereas the costs of DIYing aren't. Per Netflix's blog post about why they use AWS for serving everything except video content - "We could have chosen to build out new data centers, build our own redundancy and failover, data synchronization systems, etc. Or, we could opt to write a check to someone else to do that instead." Oftentimes for enterprise, having all your infrastructure in place, done right the first time, with someone else eating any costs associated with the unexpected, and ready to start building your application on, is worth the cost. For enterprise, paying a known amount to avoid risk is oftentimes worth it.
- ksec 11y agoOff Topic, Previously I was always put off by Amazon's design. You can click on anything Amazon related, AWS included and see some fugly UI and layout. And i got to check AWS again and i am pleasantly surprised things have improved dramatically!
- nkassis 11y agoYeah the site is slowly migrating to a new design but it so huge and run by some many teams that it takes them time to get it all into shape and by then a new style is being brought out.
- danbucholtz 11y agoIt's a better UI than Azure imo. The UI is not nearly as intuitive or clean.
- irishcoffee 11y agoAs an aside, I worked in a directorate, and the director of said directorate (who worked at amazon before us) told a story every so often of meetings he would be invited to, where the amazon UI team would agonize over specific pixel placements of text and images on the amazon website. The amusing part to me (this was years ago) was internally I was always thinking "their website is, at the very least, non-intuitive and overwhelming" when he told such stories. I guess they found better UX people. =pp edit: typo
- mbesto 11y agoSummary: Many design elements work for Amazon.com mainly because of its status as the world's largest and most established e-commerce site. Normal sites should not copy Amazon's design. http://www.nngroup.com/articles/amazon-no-e-commerce-role-model/ http://www.nngroup.com/articles/amazon-no-e-commerce-role-mo...
- yokohama11 11y agoThat report is a decade old. While I'm not going to hold up Amazon as the ideal e-commerce design, the site has been drastically altered since 2005 and many of those complaints are invalid now.
- sudhirj 11y agoCan someone explain how Amazon is different (in investor mindset, not legality) from a Ponzi scheme? It seems like retail companies (and even some startups) exist solely by churning investors with new money. Everyone invests based on expected profit at the end of the rainbow, and a lot of money is made selling to the next set of investors who want to carry on rainbow-chasing. If Amazon were to stop and start making a profit, wouldn't they immediately be undercut by the next generation of quasi-ponzi companies who are now willing to sacrifice short term profits?
- sudhirj 11y agoIt seems like the economic equivalent of getting on the tiger's back. You just have to hold on and keep going.
- smackfu 11y agoIt's not like Amazon is issuing a lot of new stock, so they aren't making any money if the stock changes hands. https://ycharts.com/companies/AMZN/shares_outstanding https://ycharts.com/companies/AMZN/shares_outstanding
- atopuzov 11y agoEmployee burn down rate increases 250% yoy
- _pmf_ 11y ago"Bezos ... Click Here For 100 Reasons Why Shortsighted Silicon Valley ADHD Investors Hate Him"