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Amazon's Profits Are Floating On a Cloud (Computing)
HughPickens.com writes: The NY Times reports that Amazon unveiled the financial performance of its powerful growth engine for the first time on Thursday, and the numbers looked good, energized primarily by renting processing power to start-ups and, increasingly, established businesses. Amazon said in its first-quarter earnings report that its cloud division, Amazon Web Services, had revenue of $1.57 billion during the first three months of the year. Even though the company often reports losses, the cloud business is generating substantial profits. The company said its operating income from AWS was $265 million.
Amazon helped popularize the field starting in 2006 and largely had commercial cloud computing to itself for years, an enormous advantage in an industry where rivals usually watch one another closely. At the moment, there is no contest: Amazon is dominant and might even be extending its lead. Microsoft ranks a distant No. 2 in cloud computing but hopes to pick up the slack with infrastructure-related services it sells through Azure, the name of its cloud service. Amazon executives have said they expect AWS to eventually rival the company's other businesses in size. The cloud business has been growing at about 40 percent a year, more than twice the rate of the overall company and many Wall Street analysts have been hoping for a spinoff.
As for Google, the cloud was barely mentioned in Google's earnings call. Nor did the search giant offer any cloud numbers, making it impossible to gauge how well it is doing. But the enthusiasm of Eric Schmidt, Google's executive chairman, was manifest when he spoke at an event for cloud software developers this week. "The entire world will be defined by smartphones, Android or Apple, a very fast network, and cloud computing," said Schmidt. "The space is very large, very vast, and no one is covering all of it."
Amazon helped popularize the field starting in 2006 and largely had commercial cloud computing to itself for years, an enormous advantage in an industry where rivals usually watch one another closely. At the moment, there is no contest: Amazon is dominant and might even be extending its lead. Microsoft ranks a distant No. 2 in cloud computing but hopes to pick up the slack with infrastructure-related services it sells through Azure, the name of its cloud service. Amazon executives have said they expect AWS to eventually rival the company's other businesses in size. The cloud business has been growing at about 40 percent a year, more than twice the rate of the overall company and many Wall Street analysts have been hoping for a spinoff.
As for Google, the cloud was barely mentioned in Google's earnings call. Nor did the search giant offer any cloud numbers, making it impossible to gauge how well it is doing. But the enthusiasm of Eric Schmidt, Google's executive chairman, was manifest when he spoke at an event for cloud software developers this week. "The entire world will be defined by smartphones, Android or Apple, a very fast network, and cloud computing," said Schmidt. "The space is very large, very vast, and no one is covering all of it."
What is probably the saddest is Microsoft. Their two biggest cash cows (Windows and Office) are under tremendous pressure. And they really have trouble innovating in ways that are replacing that income. They chase everybody else, late to the game: mp3 players, search, cloud services, online email, smartphones, etc. Their constant focus on Windows over the Ballmer years really blinded them to all else that was an opportunity in the computing world. And so companies like Amazon, Apple, and Google are there instead.
A bigger machine in a far away place always had the cost advantages of the economy of scale. Everytime there is a jump in connection speeds and bandwidth some customers found it cheaper to "out source" computing to a remote machine. But eventually the advantages of local storage and local computation adds up. So let us see how long this iteration lasts.
sed -e 's/Chuck Norris/Rajnikant/g' joke > fact
Seems like this should really be IBM's forte. I wonder why they didn't jump into it with both feet.
-jcr
Cheap commodity services was never IBM's forte - they don't want to rent you a $20 virtual server that you maintain yourself, they want to sell you a million dollar mainframe and $10,000 Intel servers that you pay IBM to maintain.
OpenMPI is a messaging system designed for massive cluster supercomputers on private high-speed networks, why would you think running a test would be cheap using cloud resources which already have a significant premium?
And it sounds like you need to spend some time looking through the AWS console. If something shows up on your bill in AWS, it is running somewhere and you most certainly set it up. The entire process is completely automated so the only human error is your own.
I help run six AWS accounts, ranging in monthly expenses of $400 to over $12,000, and never had a billing issue. In fact, on that bigger account we were leery of the costs as well so we setup an auditing system to keep an eye on transfer costs and S3 usage on the servers themselves. The numbers our auditing system provided matched what Amazon was telling us down to the tenth of a cent. Many transactions differ by a tenth of a cent because I imagine our auditing system was tracking at a faster pace and Amazon rounded up somewhere in the difference.
We do not use their Workspaces service but I am pretty sure the moment you create a Workspace, there is a box sitting there running for you at all times so it doesn't matter if you use it or not. The service is meant for people who work remotely constantly. If you want to be billed only when you are using a box, you can setup an EC2 instance and only turn it on when you need to use it.
I think there are even apps for desktop or smartphones that can do that for you (turn the EC2 instance on when you want to connect).