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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.
There are HUGE barriers to entry. What is the reason behind the "barrier to entry is becoming less and less each day"?
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No, they could get billions to fund the rest of the business with by selling it. It would be a huge IPO. Potentially wirth more than the profits.
If they spin it off, it likely wouldn't IPO, Amazon would be the only stock holder. All profits from AWS are already factored into Amazon's stock price, another IPO would be unnecessary
Amazon Web Services, Inc. is a separate corporation wholly owned by Amazon.com Inc
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Seems that they are using AWS profits to fund other parts of the business. I would guess that would negate any benefits to a spinoff.
No, they could get billions to fund the rest of the business with by selling it. It would be a huge IPO. Potentially wirth more than the profits.
AWS is eventually going to be a $30 billion sales business, capable of generating $3+ billion in net income. It'll legitimately be a nearly $100 billion market cap company unto itself in ten years. If Amazon is smart, they'll wait until it achieves a much larger scale before spinning it off, it's obviously a huge pot of gold in the equity value.
Earlier quoted context omitted.
There are HUGE barriers to entry. What is the reason behind the "barrier to entry is becoming less and less each day"?
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.
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.
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?
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?
What is the advantage to spinning it off to its own company?
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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.
Most analysts seem to think that AWS is way bigger than Google's public cloud. That channel lead may well be right in terms of total number of servers or MW of datacenter capacity. BUT scale is not the only thing that the cloud brings. AWS is not just S3 and EC2. I think it's pretty clear that Amazon is much further along the road of productizing their cloud. i.e. providing all the products that businesses and most n…
My experience with Kubernetes and Managed VMs and as an App Engine dev since 2009 compared to Amazon's latest offerings such as Glacier and RedShift shows Amazon is distinctly targeting the present with these legacy plays. Google is targeting the future.
Not much talked about: Google's profitability gives it a distinct advantage in its ability to wage a price war compared to Amazon should have anyone on Amazon's platform concerned.
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?
What is the advantage to spinning it off to its own company?
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.
Earlier quoted context omitted.
No, they could get billions to fund the rest of the business with by selling it. It would be a huge IPO. Potentially wirth more than the profits.
If they spin it off, it likely wouldn't IPO, Amazon would be the only stock holder. All profits from AWS are already factored into Amazon's stock price, another IPO would be unnecessary
I agree, it seems unlikely in the near future given Amazon's history, but it could happen. Maybe 10-20 years from now when Bezos has retired, a new CEO or three has been in place and the public markets aren't as forgiving of Amazon as they are now.