back to article Amazon is at this point a money-printing cloud machine with a grocery store in the parking lot

Amazon, a global cloud compute provider with a gift shop on the side, is slipping in the stock market despite posting another solid quarter. The AWS side of the Bezos biz stayed strong in the three-month Q3 FY 2018 period, ending September 30. Here's a summary of the digits: Revenues of $56.6bn were up 29 per cent from $43. …

  1. FuzzyWuzzys Silver badge
    Big Brother

    It's quite frightening to think how much government and fiancial data is all under just one "roof" now. We all know they have multiple sites and an infrastructure to die for, however if they survive without any serious incidents for the next 5-10 years there probably won't be any other serious contenders in the online storage and processing markets. The fact that they offer everything you need from the lowest level virtual tin right up to ready made website/stores with a click of a button. Now just imagine which government's secret spy agency wouldn't sell their grannys, partners and children to get their hands on what's in those locked down AWS containers and stacks.

  2. Anonymous Coward
    Anonymous Coward

    Wrong reason to worry...

    Look,

    At this point AWS is nothing more than a service vendor.

    The really sad point is the mantra that we must move everything to the cloud.

    And just because you're in the 'cloud' doesn't mean that you can still have access if the data center where your data/code reside goes down. (Unless you plan and pay for the redundancy.)

    I sat thru a couple presentations this past week were every cloud vendor touts the cheap cost of storage and then how you can pay for what you use... e.g. time spent using a very expensive GPU unit instead of paying for the whole unit.

    What they don't tell you is that it would be cheaper for you to buy the GPU unit, the storage the CPUs if you have a continuous workload. So if you did a 3 year TCO on Prem would be cheaper than the cloud. Assuming you either already own the DC or are leasing it. (If you own the DC its a sunk cost spread across the enterprise, if you are leasing it, that can be figured in to the equation.) What they don't tell you is that hidden cost is in taking the data out of the cloud.

    There's a lot more to it... and I'm not suggesting that there are not scenarios where the Cloud can make sense... however most pointy haired managers don't do their homework and jump on the latest trend taught to MBA students who really don't know what they are talking about. The truth is that depending on your business, you may need it.

    With the advent of Kubernetes and Containers... you can put the cloud in to your existing DC or leased space and come out ahead.

    Of course that means you need talent, and of course don't want vendor lock in by using the tools that they have created.

    You need to have a serious architecture discussion and unfortunately there are only a handful of qualified people who actually know what they are talking about and are in a position to give you and your company an honest assessment.

    Posted Anon for the obvious reasons.

  3. phuzz Silver badge

    "those locked down AWS containers and stacks"

    Well, one would hope they're locked down, but it doesn't seem like a week goes by at the moment without a "Company X leaked oodles of data left in unsecured S3 bucket" or similar.

    Of course, these containers will be administered by the US government, so I'm sure they'll be secure, right?

  4. MonkeyCee Silver badge

    Re: Wrong reason to worry...

    "What they don't tell you is that it would be cheaper for you to buy the GPU unit, the storage the CPUs if you have a continuous workload."

    Obviously. It's always about what workload you have versus you want to pay for.

    The hardest part is estimating the workload you don't have yet.

    One of the reasons that on prem is good is because once you've got sufficient load to justify it, then all the excess available load is (apart from power and wear and tear) is available for pretty much sunk cost. If you have to justify each load then it gets harder.

    It's like outsourcing your printing, to save having people order toner and paper, and tracking each users print costs. Saves on the pennies, but now people won't print useful stuff out.

    And while AWS isn't Oracle for lock in, my experiences of getting even small amounts of data out are interesting. It's certainly the hardest part of any ops stuff dealing with AWS that I encountered.

    That being said, I totally use it. Being able to spend 30 quid to spin up a chunky instance to test that something scales up correctly is always going to be cheaper to me than having a 10k++ enterprise level test box sitting around.

  5. boltar Silver badge

    "Now just imagine which government's secret spy agency wouldn't sell their grannys, partners and children to get their hands on what's in those locked down AWS containers and stacks."

    If their security is as bad as the appalling AWS website where you have to navigate a maze of unclear

    and confusing links to find anything (barely) useful, then those spy agencies have probably been busy

    inside it for quite a while.

  6. Jaybus

    Re: Wrong reason to worry...

    "The really sad point is the mantra that we must move everything to the cloud."

    I agree. However, AWS is only 10% of revenue, yet 67% or income, making it obviously overpriced. The mantra may change when someone figures out it isn't the cheapest option after all. In the end, money talks and bs walks.

  7. Ian Michael Gumby Silver badge

    Re: Wrong reason to worry...

    Actually AWS can lock you in.

    If you don't understand how... its already to late. ;-)

  8. Yobgod Ababua
    WTF?

    Indeed

    "Earnings per share of $5.75 were well above analyst estimates of $3.14"

    "Wall Street was disappointed with the numbers overall, as Amazon shares were down 7.7 per cent at $1,645.56 in after-hours trading."

    This makes no sense. Wall street makes no sense. "Oh... you did almost twice as well as we expected... we're disappointed in you." WTF?

    (No commentary on the juggernaut's progress, just how does our financial system make any sense at all?)

  9. diodesign (Written by Reg staff) Silver badge

    Re: Indeed

    Tech stocks as a whole have been generally down this week in the US - although Microsoft was all right.

    Witness AMD: sure, small revenue increase (4%, missed estimates) and weak Q4 guidance with GPUs, but +67% profit and whoosh there goes 25% of the company value as traders hit 'sell'.

    C.

  10. Destroy All Monsters Silver badge

    Re: Indeed

    Wall Street was disappointed with the numbers overall, as Amazon shares were down 7.7 per cent at $1,645.56 in after-hours trading.

    Wall Street is waiting for the next free-money fueled pyramid scheme which isn't forthcoming.

    Brace for impact.

    Oh, and Bezos could help Belgium buy the stupid 34 F-35s they want for "defence" (more like hangar sitting, a new practice, possibly a fetish, now in fashion in military circles). The deal is priced at 6.5 x 10⁹ USD. Initial cost only of course, but kickbacks included.

  11. Tromos

    Re: Indeed

    It's not the financial system at fault here, it's the people playing it and their insane greed. For a wider example I refer you to the lottery a few days ago where little interest was shown for weeks while the maximum payout was a few 10's or 100's of millions of dollars, but queues formed to take a crack at the top prize when it got to 1.6 billion.

  12. Pascal Monett Silver badge

    Re: Indeed

    Insane I agree. Must have something to do with all those Golden Boys shorting Amazon at $57 billion and getting stuffed because it "only" made $56 and a half, so of course, they punish Amazon instead of getting the whipping they deserve for having made a bad estimate.

  13. Charlie Clark Silver badge

    Re: Indeed

    The article draws the wrong conclusion. The market is very volatile this week (Wednesday saw indices wipe out all the "gains" of the year) so your likely to be seeing profit taking as much as anything else.

    Expect calls for a dividend if AWS revenues continue to grow like this.

  14. LDS Silver badge

    Re: Indeed

    It's the automatic nature of finance today - they failed an estimate so wallstreetdroids sell. It's no surprise people like Buffet asked to end quarterly earnings forecasts - analysts should be back to analyze what a company is really doing, instead of just looking at a few numbers. which also forces many companies to adopt often the wrong decisions just to met those numbers, especially when bad executives are more worried about their stock options than the company health.

  15. Shady

    Re: easy pickings

    "Tech stocks as a whole have been generally down this week in the US - although Microsoft was all right."

    Intel shipped i9 in volume, and their stock has fallen.

    AMD is doing incredibly well (for them), and their stock fell off a cliff

    Amazon almost doubled earnings, and their stock plummeted

    And Microsoft royally fucked up the latest Win 10 update and came out unscathed.

    This is why I'm not a successful trader.

  16. Anonymous Coward
    Anonymous Coward

    Re: Indeed

    >.....Belgium buy the stupid 34 F-35s they want for "defence" (more like hangar sitting, a new practice, possibly a fetish, now in fashion in military circles)

    You never know, Germany might be thinking 3rd time lucky.

  17. Ian Michael Gumby Silver badge
    Boffin

    @diodesign ... Re: Indeed

    There's nothing shocking here.

    Its called taking your money (profits) and running. Its the end of the year.

    So if you bought earlier this year or so... (longer to qualify for Capital gains and not ordinary income) you would be smart to move out of tech.

    There is also a bit of a question mark due to Trump's tariff talk and also the 2018 midterm elections.

    So no need to panic ...

  18. Charlie Clark Silver badge

    Re: easy pickings

    Amazon almost doubled earnings, and their stock plummeted

    Apart from profit-taking, you're forgetting the share price is usually a bet on future earnings. Amazon already has a highly unusual P:E ratio and several profit reports have come in below expectations suggesting that profit growth is slowing.

    But virtually no one makes money on the stock exchange with their own money. Much better to get someone to pay you to make their bets for them. After all, this is how Wall Street works…

  19. Version 1.0 Silver badge
    Coat

    Re: Indeed

    You want to buy something to defend your country? I think that buying Alexa would be better.

  20. LucreLout Silver badge

    Re: Indeed

    Expect calls for a dividend if AWS revenues continue to grow like this.

    That'd really increase the tax due, so I'm not expecting a dividend any time soon. Amazon will simply redeploy the earnings into other growth areas for them, and continue the R&D based tax reduction to ensure revenues continue to grow at the current ballistic rate.

    AWS is my main (only?) reason for buying Amazon shares - I'm not that interested in the "gift shop".

  21. s. pam

    They’re still the most shit

    Amazon May be the 9,000,000Kg gorilla for cloud stuff but their video service runs at 9600 Baud for downloads.

    We’ve got 250mbps to our house and pull down a Netflix movie in 5-10 seconds whilst Amazon Video takes 5-10 MINUTES.

    Hey Jeffy boy, we’re customers too

  22. Anonymous Coward
    Anonymous Coward

    Re: They’re still the most shit

    You don't get rich by giving good service. Maximum cost + lowest service = maximum profit.

  23. Charlie Clark Silver badge

    Re: They’re still the most shit

    You could always cancel your account… that might get them to notice you.

  24. LDS Silver badge
    Devil

    "whilst Amazon Video takes 5-10 MINUTES"

    First world problems...

  25. Mage Silver badge
    Boffin

    Re: Netflix

    Netflix has deals with ISPs for them to host Netflix servers. Particularly ISPs offering bundles. Netflix is more concerned about rapid subscriber growth than profit (they have none?).

    Amazon is more cautious. They don't have the ISP deals either, hence things like exclusive live tennis coverage falling over.

    NO streaming only service should have sport exclusives. Possibly Pay TV should not have exclusives on live sport.

  26. phuzz Silver badge

    Re: They’re still the most shit

    You have two services, one of which works and one doesn't. So the obvious solution to this problem is to go on the internet and complain. Sure, that'll fix it.

  27. dave 93

    Re: They’re still the most shit

    Netflix runs on AWS

  28. Gene Cash Silver badge

    Re: "whilst Amazon Video takes 5-10 MINUTES"

    No kidding... here I have to use youtube-dl to grab videos so I can watch them in a non-postage-stamp resolution w/o stuttering, and it still takes 5-30 minutes.

    Mainly because I refuse to pay more than $80/mo for internet.

  29. LDS Silver badge

    "Possibly Pay TV should not have exclusives on live sport"

    Which would make the very Pay TV business quite impossible (which anyway I believe that's your aim) - and would result in less popular events being not broadcasted at all, or broadcasted not live in the middle of the night (as it happened here with tennis - you were lucky if you could see at least the Wimbledon final)

    Anyway, it would also mean to ask team and players to get a huge pay cut (no competition for TV rights, less income...) - not that I appreciate they are paid those absurd sums to perform an entertainment form that often is quite "stupid", but it looks the whole business in now based on huge expenses, and fans like it...

    And there's no constitutional right to free football or whatever.

  30. IsJustabloke Silver badge
    Trollface

    Re: "Possibly Pay TV should not have exclusives on live sport"

    "And there's no constitutional right to free football or whatever."

    'm pleased its behind a paywall , makes it easy for me to avoid

  31. Charlie Clark Silver badge

    Re: Netflix

    Netflix is more concerned about rapid subscriber growth than profit (they have none?)…Amazon is more cautious.

    Say what? Bezos has repeatedly scorned the idea of making a profit and, as he has a controlling interest, what he says goes. This seems more like the problems associated with Amazon's scattergun approach to business. Oh, and the end of net neutrality rules.

  32. Anonymous Coward
    Anonymous Coward

    Re: They’re still the most shit

    IIRC Netflix only runs control plane, management, billing etc. in AWS. They have their own CDN for the video content itself.

  33. NeilPost

    Re: They’re still the most shit

    Yet much of Netflix runs on AWS.....

  34. Anonymous Coward
    Anonymous Coward

    Meanwhile revenues Apple Services ...

    Apple revenues of $9,5bn in Q4

    (Apple services being the category that includes everything from iTunes to the App Store, Apple Music, iCloud and more.)

    https://www.ped30.com/2018/10/25/services-estimates-q4-2018-apple/

  35. cNova

    I guess now that they have some pocket change, they won't need desperately to trick me into getting Prime.

  36. NeilPost

    Never any mention of AWS when bleating about tax

    Funny how there is never ever any mention of AWS when there is belly-aching about Amazon’s tax affairs globally.

    This has sucked up an enormous amount of investment over the last decade in DC’s, hardware, comms and ecosystem development.

    20 years ago Amazon punted books off a ropey internet site in a handful of countries. That’s it.

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