Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Amazon Web Services revenue rises 81% year over year

blogs.wsj.com

Post reply on HN
Print view View original

51–60 of 150 posts

Re: Amazon Web Services revenue rises 81% year over year

#51

Post by boomshucka »

fnayr wrote: post #5

36% of Amazon's operating profit is now from AWS. That's crazy!

They do some kinda misleading accounting for AWS. They don't count the capital leases as expenses in "operating income" for AWS, it get's counted at the entire company level. So, because they don't have to expense any depreciation/(expense for capital expenditure in some form) at the AWS level, the "operating profit" at AWS is artificially high and would be negative if it was properly showing the economics of that business.

This isn't to suggest amazon as a whole is doing anything wrong, they are following accounting standards, but that is one place where the standards for capital leases are misleading if you don't read the fine print.

Re: Amazon Web Services revenue rises 81% year over year

#52

Post by colechristensen »

NhanH wrote: post #19
guelo wrote: post #14

Earlier quoted context omitted.

That'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.

Amazon 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.

There was a big price correction last year which was fairly clearly attributable to competition, especially Google. There will never be quite the cutthroat competition that retail brings, but Amazon is positioning itself as a logistics provider not a retailer.

Re: Amazon Web Services revenue rises 81% year over year

#53

Post by x0x0 »

sokoloff wrote: post #47
x0x0 wrote: post #42

Earlier quoted context omitted.

They 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…

There 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=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 q…

But your capital lease payments aren't included in (ie removed from) that operating profit. Since you don't know which is larger, I remain befuddled how you claim aws is profitable.

Re: Amazon Web Services revenue rises 81% year over year

#54

Post by jjoonathan »

thoman23 wrote: post #37
NhanH wrote: post #19

Earlier quoted context omitted.

Amazon 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.

Agreed, but Amazon as a retail operation is so well run with such excellent customer service it's hard to imagine Walmart outcompeting them.

Walmart 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.

Re: Amazon Web Services revenue rises 81% year over year

#55

Post by sarwechshar »

jasondc wrote: post #13

It's only a matter of time before they split AWS from Amazon, just wondering why they're waiting so long.

It is propping up the rest of their business (which is doing very well but like others have said has very low or negligible margins).

If anything, they could leverage their cloud tech further in the consumer space by developing uses for it beyond just video streaming (could be other uses but this is the main one I am aware of). I think we've seen that with Echo and a next-gen version could easily do more as an assistant, an all encompassing one for any digital support needs. Perhaps also stream games a la PS Now.

Re: Amazon Web Services revenue rises 81% year over year

#56

Post by andymurd »

syllogism wrote: post #36
afarrell wrote: post #9

I wonder how much of that is people forgetting to shut down unused EC2 instances

It really feels like they design the thing to make that happen. I got stung for over $100 just as a casual user, because I never guessed that I had to click through all the (slow loading) regions to see the instances and volumes and snapshots I might have burning money. The web interface is a total clusterfuck.

Agreed - there's an opening for a great desktop software solution to manage all AWS services. Kind of like CloudBerry Explorer but for more than S3.

Re: Amazon Web Services revenue rises 81% year over year

#57

Post by cryowaffle »

click170 wrote: post #27
w-ll wrote: post #24

Earlier quoted context omitted.

Except 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.

This is the exact reason why I refuse to give amazon a non-prepaid visa card. Where I live, every grocery store sells them without requiring ID.

Are you trying to protect your identity or just make sure the bill doesn't go over a set amount? If the latter then it shouldn't matter if ID is required.

Re: Amazon Web Services revenue rises 81% year over year

#58

Post by ripken »

andymurd wrote: post #56
syllogism wrote: post #36

Earlier quoted context omitted.

It really feels like they design the thing to make that happen. I got stung for over $100 just as a casual user, because I never guessed that I had to click through all the (slow loading) regions to see the instances and volumes and snapshots I might have burning money. The web interface is a total clusterfuck.

Agreed - there's an opening for a great desktop software solution to manage all AWS services. Kind of like CloudBerry Explorer but for more than S3.

There is one, it's called elastic wolf

Re: Amazon Web Services revenue rises 81% year over year

#59

Post by andymurd »

ripken wrote: post #58
andymurd wrote: post #56

Earlier quoted context omitted.

Agreed - there's an opening for a great desktop software solution to manage all AWS services. Kind of like CloudBerry Explorer but for more than S3.

There is one, it's called elastic wolf

Awesome, I will give that a try.

Re: Amazon Web Services revenue rises 81% year over year

#60

Post by downandout »

I'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.
Post reply on HN