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AWS’s Share of Amazon’s Profit

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Re: AWS’s Share of Amazon’s Profit

#81

Post by kayoone »

kelnos wrote: post #63
kayoone wrote: post #48

Earlier quoted context omitted.

I am not "foisting responsibility". There are fallbacks and fail safes in place to mitigate such issues but that's not my point. My point is that they sell us a dream of infinite scaling, all managed and no more problems, which just isn't the case. I know, it's naive to believe that in the first place but the marketing certainly goes into that direction and some proponents spin this story all the time. Would the alte…

I think you're maybe mixing up different things? "Infinite scaling" doesn't mean your app is failure-free and constantly available. In my experience AWS's scaling features work pretty well, as does their on-demand provisioning. But they have very little to do with tolerating infrastructure failures. That's up to you, regardless of whether you're developing on AWS or on hardware you own.

Let me provide an example. When we recreated a big Elasticsearch cluster, AWS ran out of available instance types in that AZ resulting in the cluster never going into a green state because a node was missing. This is not something you typically worry about when you choose a cloud provider. Your tone is a bit condescending tbh, you don't need to lecture me about the importance of a fault tolerant distributed system.

Re: AWS’s Share of Amazon’s Profit

#82

Post by andrewguenther »

Illniyar wrote: post #75
rexreed wrote: post #69

He's overly simplifying the contribution to profit by not understanding the contribution to expenses. It's not his fault because Amazon doesn't break it out that way. They don't allocate certain expenses to AWS and other expenses to other branches. While there's no doubt that AWS is very profitable, to say it contributes a certain percentage to overall profits probably misses the mark tremendously. It's probably and…

I thought Amazon don't use aws for their main product. Do they use it for alexa?

The retail website uses AWS.

Re: AWS’s Share of Amazon’s Profit

#83

Post by redis_mlc »

crazygringo wrote: post #23
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…

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

Not exactly.

To avoid paying taxes, any extra net income is reinvested. It's like a religion in senior management to avoid taxes. And to lobby for employee non-competes, too.

Also, margins on retail are not the same as pure tech companies, like Google or Microsoft. US grocery stores, like Safeway, have net income in the 1% of total revenue range, so if Amazon can make 10-15% on retail, that's impressive.

Re: AWS’s Share of Amazon’s Profit

#84

Post by dx034 »

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.

There are also dedicated servers for a fraction of the price. The choice isn't AWS or own datacenter, there's a lot in between.

Re: AWS’s Share of Amazon’s Profit

#85

Post by kvz »

dlhavema wrote: post #79
Illniyar wrote: post #75

Earlier quoted context omitted.

I thought Amazon don't use aws for their main product. Do they use it for alexa?

I know a colleague that worked on Alexa stuff and he said they did use AWS infrastructure and part of his job was reducing the cost Alexa paid to AWS...

On the one hand that sounds weird and AWS could just offer any discount, on the other if they can get done the same on less resources, others can rent the freed up resources at a premium

Re: AWS’s Share of Amazon’s Profit

#86

Post by dangero »

rb808 wrote: post #59
mbesto wrote: post #38

Profit can be a really weird number, especially when it comes to data centers. So looking at pure earning statements numbers is likely going to be misleading no matter how you try to look at (unless you actually look at bank statements, you can create as many interpretations as you want). First, data centers require A LOT of upfront capital. This capital is then capitalized over years, which is how it ultimately affe…

"printing money" yes today, but if GCP/Azure or something else comes in and competes heavily the margins could easily shrink to something negative.

Even if Google’s prices were half that of Amazon’s, it’s really hard to quantify the savings since the platform offerings are not identical, plus engineering switching costs could easily outstrip a company’s yearly cloud costs.

Re: AWS’s Share of Amazon’s Profit

#88

Post by nl »

kvz wrote: post #85
dlhavema wrote: post #79

Earlier quoted context omitted.

I know a colleague that worked on Alexa stuff and he said they did use AWS infrastructure and part of his job was reducing the cost Alexa paid to AWS...

On the one hand that sounds weird and AWS could just offer any discount, on the other if they can get done the same on less resources, others can rent the freed up resources at a premium

It's pretty normal to account for use of cross department internal resources in some kind of financial way within corporations.

Re: AWS’s Share of Amazon’s Profit

#89

Post by fomine3 »

AmericanChopper wrote: post #76
mwakerman wrote: post #17

Earlier quoted context omitted.

I agree and just want to add IAM to the list of AWS Lock In services. We provisions environments almost entirely using Config-as-code tools (packer, ansible, terraform) and generally have a good blueprint for what an environment looks like and the parts I’ve had the hardest time thinking about migrating to another cloud provider is all the IAM rules that magically give hosts/services the ability to talk to other serv…

IAM is simply one of AWS's killer features. It's just a service that's so good it differentiates itself from the competition. Lock-in based on quality is not the sort of lock-in that I'm most worried about, because it's very clear what I'm getting in return for it. The alternative to using IAM to begin with would be to commit to work comparable in scope to that required to migrate away from it in the future.

Avoiding use of Lambda(example) is possible but for IAM?

Re: AWS’s Share of Amazon’s Profit

#90

Post by tanilama »

Illniyar wrote: post #75
rexreed wrote: post #69

He's overly simplifying the contribution to profit by not understanding the contribution to expenses. It's not his fault because Amazon doesn't break it out that way. They don't allocate certain expenses to AWS and other expenses to other branches. While there's no doubt that AWS is very profitable, to say it contributes a certain percentage to overall profits probably misses the mark tremendously. It's probably and…

I thought Amazon don't use aws for their main product. Do they use it for alexa?

It is complicated.

It is definitely wrong to say retail doesn't use AWS.

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