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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."
I'm a Google Fanboy so when I wanted to set up a cloud server for a webapp I went straight to Cloud Compute. I had been burned by AWS phantom charges in the hundreds of dollars that could not be identified from their management console. Starcluster based OpenMPI "hello world" experiment turned $500 CC expense.
Anyway, right as I'm getting settled in to Cloud Compute(very happy with their tutorial on setting up mongoDB etc.) I'm building my web app and Cloud Compute suspends my account for terms of use violation out of the blue. No explanation. Just got flagged by heuristic analysis based on CC country vs. IP address continent probably(on vacation).
Whatever reason they flagged the account, I went through a nightmare ~1 week trying to get my account unfrozen. I eventually gave up and started a new AWS account which is now billing me $30/month for a Windows Server 2008 "Workspaces" instance I NEVER use. Moral: Google TOU "Kangaroo Courts" and shit customer support in appeals lost them my business, so I have a hard time crying for my favorite company on this front.
If they can't handle their shit with someone who WANTS to give them money I have no sympathy.
Given that Microsoft seems to be investing heavily in Azure, I'd wonder exactly how they plan to beat AWS. AWS had some new machine learning algorithm added a month ago; Azure doesn't have that. Either way, however, is a win. If Microsoft's making some fatal mistake with their new business model, then maybe they'd go bankrupt and help the industry by going open-source before death. If Azure stays where it is or ranks up in usage with its SaaS model, then there'll probably be some interesting competition between them two and Google with large user bases. Either way, there's competition, which will (almost) forever spiral downward prices and upward capabilities.
And now they are producing their own entertainment a la Netflix.
And they are making money from providing the back end for Netflix. So Amazon is producing their own content a la Netflix, AND Netflix is writing them a fat check every month. Netflix even has a public case study about how they use AWS ... and contribute to making AWS better.
http://aws.amazon.com/solution...
http://www.fastcolabs.com/3013...