Amazon Web Services must be spun-off from its mothership to prevent it losing out on cloud customers, one analyst has argued – but a break-up could render AWS toothless, says The Reg. The spin-off was recommended by Oppenheimer analyst Tim Horan in a report published on Monday. "In our view, we believe an ultimate spin-off of …
el reg said it best
"Amazon's EC2 was likely the brainchild of a mid-level ops director who overbought for a data center and had to come up with a way to save his own ass. Use a free, open source project like Xen for virtualization, give it a sunshine-up-the-ass name like Elastic Compute Cloud, and start pulling in all those venture capital dollars like Cisco and Sun did during the first dotcom catastrophe. Fuck me, give that man a raise."
it makes sense to me, given that they had to build for peak capacity in Q4, which was probably 3-10x+ what they needed for the rest of the year.
From my talks with people who claim to be at ground zero of the birth of EC2 they dispute this theory, but I don't know if I believe them.
Re: el reg said it best
That's just awesome -- you don't believe the people who were there at the time, preferring your own narrative. That's the stuff of legend. Literally.
"an ultimate spin-off of AWS is inevitable due to its channel conflicts and the need to gain scale"
Psshttt, nonsense. This is all.
I really don't see where they get this stuff from - Amazon probably doesn't actually give a damn, and the fact that it's linked to a site like Amazon probably gets them 10x more customers than web shops they lose.
Like Microsoft ended spinning-off its OS, because they could not possibly produce an OS and at the same time compete with their Office suite against other business suites running on that OS.
Bezos certainly knows what he's doing; and I doubt he needs advice from Openheimer.
Analysts - anyone can play
rising to $101bn by 2018
I love it! Sales won't be going up to just a paltry $100 billion. Oh no! My calculations are so precise that I can predict them to 1% accuracy over 5 years! I'm just that awesome!
I guess I can see his argument. But as El Reg points out, he seems to have forgotten the advantages to Amazon and their own cloud service of being one company.
I really must quit my job, and get me a job as an analyst. Does anyone want to pay me for my predictions on the sales of Apple iDevices in the future? Apple should split off the iPad division as a separate company, as it's causing the letter 'i' to fall off their typewriters, and thus threatening the sales of their most lucrative product, the iPhone. In 2018 Apple will sell 127,357,207 iPhones.
Yes, thanks, very helpful
possibly even operating as a REIT," the insider's acronym for a real estate investment trust
That's the least-useful parenthetical I've seen in some time. How large is the intersection of readers who know what real estate investment trusts are, with the set of those who don't recognize the REIT acronym? "Oh, I'm hip to US tax dodges like real estate investment trusts, but I'm not, y'know, an insider. No one I talk to has ever abbreviated that phrase."
And yes, I know there was an explanatory link for REIT - which should suffice for anyone who's curious and doesn't know how to search the web. And I do know what a REIT is, having gotten curious one year while doing my tax return. But the clarifying appositive clarifies nothing for those who don't know.
Aside from that, a good article. Oppenheimer's arguments for spinning AWS off look pretty weak.