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AWS’s Share of Amazon’s Profit

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Re: AWS’s Share of Amazon’s Profit

#21

Post by andrewfromx »

tootie wrote: post #12
rvz wrote: post #4

Earlier quoted context omitted.

Which Amazon has thanked almost everyone and their grocery stores for jumping on their bandwagon and spending nearly all their VC money on these services. Those without any significant revenues will have a hard-time paying up that huge AWS bill if they dared to use K8s or auto-scaling features. I would not want to look at the balance sheet of a companies accounts or quarterly earnings if they cannot generate lots of…

Do you remember the days when everyone had their own data center and setting up a server involving drawing up specs then putting in a PO then waiting for it to get delivered on a truck to be racked and formatted? AWS is magic and the price is entirely justified.

Yes and also i clearly remember in 2007 trying ec2 for first time and asking, is it production ready? Could we actually use this vs. building out a cage. And in 2007 the answer was no. Something about no external IP addresses or no load balancer possible. But yes that cage was expensive and the last cage I ever got. AWS is magic and amazing.

Re: AWS’s Share of Amazon’s Profit

#22

Post by scylla »

mulmen wrote: post #11
NickBusey wrote: post #8

Earlier quoted context omitted.

What makes this even more bonkers to me is this is from something most non-tech people haven’t even heard of.

I wonder what the equivalent is for tech people. What is an enormous industry-specific business we have never heard of?

Pharmaceutical Distribution - How many people have heard of McKesson?

Re: AWS’s Share of Amazon’s Profit

#23

Post by crazygringo »

legitster wrote: post #20

This drives me mad. I have no idea why Amazon even bothers with the retail side. It barely pays for itself, they are already the biggest player by a mile, and there is no horizon in which economies of scale start paying off (the uptick of demand from Covid probably lost them money!) The only thing that makes sense to me is some political long play. The Amazon retail operation employs a lot more people in a lot more p…

> It barely pays for itself

Because they're constantly reinvesting for even bigger economies of scale.

All investors are well aware that Amazon can start turning on major retail profits at any time it chooses.

But the more it grows first, the more entrenched it is, the fewer competitors remain, and the even larger those future profits will be.

Seeing as AMZN's stock price has increased roughly 25% since COVID started, it doesn't seem like investors think it "probably lost them money".

You don't seem to actually understand Amazon's business model at all, so please don't get too mad about it. :)

Re: AWS’s Share of Amazon’s Profit

#24

Post by djohnston »

mulmen wrote: post #11
NickBusey wrote: post #8

Earlier quoted context omitted.

What makes this even more bonkers to me is this is from something most non-tech people haven’t even heard of.

I wonder what the equivalent is for tech people. What is an enormous industry-specific business we have never heard of?

I am always amazed when I listen to my rancher buddy talk about cattle prices on weekly calls. There are so many industries I'm completely oblivious to.

Re: AWS’s Share of Amazon’s Profit

#25

Post by elastic_outlook »

rvz wrote: post #4
orf wrote: post #2

> So, if this graph is right, then over the last couple of years, somewhere between 50% and 80% of Amazon’s profit has been due to AWS.

Which Amazon has thanked almost everyone and their grocery stores for jumping on their bandwagon and spending nearly all their VC money on these services. Those without any significant revenues will have a hard-time paying up that huge AWS bill if they dared to use K8s or auto-scaling features. I would not want to look at the balance sheet of a companies accounts or quarterly earnings if they cannot generate lots of…

What's your alternative? Go on prem or build your own competing cloud provider? Probably not. The open markets have set the prices for cloud compute and storage resources.

I'd argue that the existence of cloud providers have only accelerated the growth of the tech industry and has in fact put more money in the pockets of tech workers and VCs than there would have been without the existence of an AWS/Azure/GCP/etc

Re: AWS’s Share of Amazon’s Profit

#26

Post by rubiquity »

legitster wrote: post #20

This drives me mad. I have no idea why Amazon even bothers with the retail side. It barely pays for itself, they are already the biggest player by a mile, and there is no horizon in which economies of scale start paying off (the uptick of demand from Covid probably lost them money!) The only thing that makes sense to me is some political long play. The Amazon retail operation employs a lot more people in a lot more p…

A mere 8.5 years ago this question was asked in the opposite direction.

Re: AWS’s Share of Amazon’s Profit

#27

Post by guptaneil »

legitster wrote: post #20

This drives me mad. I have no idea why Amazon even bothers with the retail side. It barely pays for itself, they are already the biggest player by a mile, and there is no horizon in which economies of scale start paying off (the uptick of demand from Covid probably lost them money!) The only thing that makes sense to me is some political long play. The Amazon retail operation employs a lot more people in a lot more p…

It's way easier to build good tools when your first customer is you. It's also easier to pitch AWS when you can say it works at "Amazon scale".

Re: AWS’s Share of Amazon’s Profit

#28

Post by teruakohatu »

mulmen wrote: post #11
NickBusey wrote: post #8

Earlier quoted context omitted.

What makes this even more bonkers to me is this is from something most non-tech people haven’t even heard of.

I wonder what the equivalent is for tech people. What is an enormous industry-specific business we have never heard of?

Agriculture, including farming (mid sized or larger), fertilizer distribution and manufacturing and seeds.

Re: AWS’s Share of Amazon’s Profit

#29

Post by jfim »

mulmen wrote: post #11
NickBusey wrote: post #8

Earlier quoted context omitted.

What makes this even more bonkers to me is this is from something most non-tech people haven’t even heard of.

I wonder what the equivalent is for tech people. What is an enormous industry-specific business we have never heard of?

Since this is such a great question, I've posted an "Ask HN" about it: https://news.ycombinator.com/item?id=23534529

Re: AWS’s Share of Amazon’s Profit

#30

Post by trappist »

legitster wrote: post #20

This drives me mad. I have no idea why Amazon even bothers with the retail side. It barely pays for itself, they are already the biggest player by a mile, and there is no horizon in which economies of scale start paying off (the uptick of demand from Covid probably lost them money!) The only thing that makes sense to me is some political long play. The Amazon retail operation employs a lot more people in a lot more p…

I think this often too. But my second thought is I have to accept the possibility that Bezos could know something I don't.
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