171–180 of 195 posts
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The impression I've gotten from friends working there is the reverse: The cloud business is making so much money it can't spend it fast enough. The retail side, meanwhile, is making money but spending it faster enough to remain "not profitable"
That's not really how accounting works
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How to you reach that conclusion from those numbers?
Because that’s literally what they say? Amazon’s physical stores and Amazon’s online retail business are not profitable. They are selling below price. This is per definition predatory pricing. They are only able to offset this because AWS is making more profit. This is evident if you just look at the numbers.
The numbers can be acceptably explained by expansion, which Amazon does all the time. For example Amazon is just investing in a new retail business in India.
Earlier quoted context omitted.
Because that’s literally what they say? Amazon’s physical stores and Amazon’s online retail business are not profitable. They are selling below price. This is per definition predatory pricing. They are only able to offset this because AWS is making more profit. This is evident if you just look at the numbers.
Perhaps it's correct but it's not evident from the numbers. The numbers can be acceptably explained by expansion, which Amazon does all the time. For example Amazon is just investing in a new retail business in India.
The value of investments is spread out over whatever is reasonable for the category (i. e.: Building: 10 years or so, car: 3 or 4 years, javascript framework: 8 hours).
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Perhaps it's correct but it's not evident from the numbers. The numbers can be acceptably explained by expansion, which Amazon does all the time. For example Amazon is just investing in a new retail business in India.
Investments don't actually diminish profits. If Amazon buys a house for 10mill$, their profit doesn't change by a cent, because while they may have less cash, they also own a 10mill$ building. The value of investments is spread out over whatever is reasonable for the category (i. e.: Building: 10 years or so, car: 3 or 4 years, javascript framework: 8 hours).
Earlier quoted context omitted.
Perhaps it's correct but it's not evident from the numbers. The numbers can be acceptably explained by expansion, which Amazon does all the time. For example Amazon is just investing in a new retail business in India.
Investments don't actually diminish profits. If Amazon buys a house for 10mill$, their profit doesn't change by a cent, because while they may have less cash, they also own a 10mill$ building. The value of investments is spread out over whatever is reasonable for the category (i. e.: Building: 10 years or so, car: 3 or 4 years, javascript framework: 8 hours).
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Investments don't actually diminish profits. If Amazon buys a house for 10mill$, their profit doesn't change by a cent, because while they may have less cash, they also own a 10mill$ building. The value of investments is spread out over whatever is reasonable for the category (i. e.: Building: 10 years or so, car: 3 or 4 years, javascript framework: 8 hours).
True for the building itself, but is buying office space and warehouses a large part of setting up a new business? I'd have thought that market surveys, planning and negotiations, hiring the initial staff etc would dominate.
The only exemption I've ever encountered is intellectual property that you create with employees – there'd be just too much uncertainty over it's value so you suffer those costs immediately (which can be a good thing, it lowers your taxes etc).
But yes, if you're investing a lot there will be some negative effect from the beginning because everything starts losing value immediately and revenue only starts later.
Note that all this is completely removed from cash flow. You'll have to pay for all the stuff you buy – usually pretty quickly. There have been companies with excellent balance sheets which still ran out of money because all the value was in illiquid investments. That's why companies often prefer to lease cars or machinery: it gets the different cycles in sync.
(all based on the laws of my small European country. Not endorsed by GAAP. Lack of acronyms caused by inexplicable loss of the relevant vocabulary once I got away from all the CXXs)
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Google stronger than Azure?
I think momentum wise yes... Google is more a service company than MS, and I believe it is more experienced in cloud technologies.
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True for the building itself, but is buying office space and warehouses a large part of setting up a new business? I'd have thought that market surveys, planning and negotiations, hiring the initial staff etc would dominate.
It depends – you can generally expense anything you buy over it's useful lifetime, so if you aquire a patent for your new project, you'll spread that investment over the next few years. If you hire an architect, it's part of the building's cost. The only exemption I've ever encountered is intellectual property that you create with employees – there'd be just too much uncertainty over it's value so you suffer those co…
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Google Cloud is amazing. Azure is terrible. Azure js for companies that, 15 years ago, were spending their budget on Windows. Great for "enterprises" that want to "leverage cloud". Azure is slow, expensive, poorly designed (network and SSD designs are just bad), and the real slap to the face is that the management UI Is worse than anything from Windows 8.
"enterprises" that want to "leverage cloud" is where all of the money is. AWS is chasing that dragon too. There is way more money selling cloud stuff to Coca-Cola and GE than to software companies.
Without vocal early adopters and evangelists in the wild, it is impossible for AWS to get to its current stage. Those people may not bring in that big of money, but they are willing to take risks and eagerly to give feedbacks, sharing their experience and come up with their own solution around it. The feedback loop is enclosed in that way, and the service can evolve with it.
MS still doesn't hit that spot yet.
update: after hour currently at 675.01. Price increase +73.01 (12.13%)