back to article Amazon: For every dollar of op. profit going into Bezos' pockets, 73 cents came from AWS

Amazon.com on Thursday reported $51bn in sales for its Q1 2018, an increase of 43 per cent from $35.7bn in the year-ago quarter. The company's net income reached $1.6bn for the quarter, or $3.27 per diluted share. That's more than double the company's Q1 2017 net income of $724m, or $1.48 per diluted share. Investors found …

  1. Steve_Jobs1974

    AWS growing at least twice as fast as Azure - probably much more

    Not sure why the media think Azure is outpacing AWS, not that it particularly matters, as Azure and AWS have much room to grow. However, if you break it down;

    “Microsoft Quarter Results: Revenue in Intelligent Cloud was $7.8 billion and increased 15% (up 15% in constant currency)”

    Microsoft does not break out Azure from intelligent cloud; So we do not know what is Windows Server (perhaps running on AWS) is and what is Azure revenue. However, assuming 100% of 7.8 Billion is coming from Azure (it is not) that would be an increase of 1.1 Billion.

    AWS Quarter Results: AWS is at 5.4 Billion growing at 49%. Which is 2.5 Billion growth

    So AWS had double the growth of Microsoft intelligent cloud. If MS took out server products, I wonder what the growth would be it would look like.

    1. Anonymous Coward
      Anonymous Coward

      Re: AWS growing at least twice as fast as Azure - probably much more

      "Not sure why the media think Azure is outpacing AWS, not that it particularly matters, as Azure and AWS have much room to grow. However, if you break it down;"

      Azure in isolation is about 1/3 the revenue of AWS, but it is growing much faster and is likely to overtake AWS in the next couple of years. All of Microsoft's cloud division including things like Office 365, SaaS, etc. does indeed already exceed the revenue of AWS.

      1. Steve_Jobs1974

        Re: AWS growing at least twice as fast as Azure - probably much more

        Taking Azure in isolation - O365 is a won game, Microsoft are dominant and lightly to stay that way.

        Azure (and server products) grew 1.1 Billion in the quarter

        AWS grew 2.5 Billion in the Quarter

        In percentage terms Azure is growing faster, but from a much smaller base. In Real Terms AWS is growing much faster. As Azure scales, the percentage growth will slow as it has done in the last two quarters.

        What's interesting is while the Azure growth rate is dropping, AWS growth rate has accelerated two quarters in a row.

        1. Anonymous Coward
          Anonymous Coward

          Re: AWS growing at least twice as fast as Azure - probably much more

          "What's interesting is while the Azure growth rate is dropping, AWS growth rate has accelerated two quarters in a row."

          No, it's the other way round, Azure is accelerating at the expense of AWS. Microsoft’s third quarter financial results (published the same day as Amazon's) revealed that Azure public cloud achieved a revenue growth rate of 93%.

          Azure’s rate of growth is marginally down from the previous quarter (98% – and fluctuations should be expected particularly at this level) but significantly exceeds that of Amazon Web Services who delivered a 49% increase,

          1. Steve_Jobs1974

            Re: AWS growing at least twice as fast as Azure - probably much more

            According to analysts – this is not the Case. Cloud revenues are climbing across all providers. However AWS is maintaining market share.

            AWS worldwide market share has held steady at around 33% for twelve quarters now, even as the market has almost tripled in size. As the cloud boom continues, Microsoft, Google and Alibaba have all substantially grown their market shares, but this has not been at the expense of AWS

            https://www.srgresearch.com/articles/cloud-growth-rate-increased-again-q1-amazon-maintains-market-share-dominance

            This ties in with the "Intelligent Cloud" financial results we in the Microsoft earnings release. Azure is growing at 90%, its a much smaller base than AWS and is not gaining on AWS in terms of market share.

    2. Anonymous Coward
      Anonymous Coward

      Re: AWS growing at least twice as fast as Azure - probably much more

      >>AWS Quarter Results: AWS is at 5.4 Billion growing at 49%. Which is 2.5 Billion growth

      That growth is per year. Microsoft's quoted growth is 15% per quarter, or about 75% a year

      1. Steve_Jobs1974

        Re: AWS growing at least twice as fast as Azure - probably much more

        That's incorrect. The results are compared year on year. At the top of their press release it states it.

        "REDMOND, Wash. — April 26, 2018 — Microsoft Corp. today announced the following results for the quarter ended March 31, 2018, as compared to the corresponding period of last fiscal year:"

        https://www.microsoft.com/en-us/Investor/earnings/FY-2018-Q3/press-release-webcast

    3. Anonymous Coward
      Anonymous Coward

      Re: AWS growing at least twice as fast as Azure - probably much more

      >>So AWS had double the growth of Microsoft intelligent cloud.

      Erm no. See https://www.computerweekly.com/news/252440084/AWS-vs-Microsoft-vs-Google-Weighing-up-the-financial-results-of-the-big-cloud-three

      Microsoft's cloud division grew 58% and Azure grew 93% in the last quarter. That's way ahead of AWS.

  2. The Original Steve

    Azure vs AWS

    For what it's worth, in my unscientific view it seems that developers opt for AWS (PaaS) whilst infrastructure geeks opt for Azure (IaaS and SaaS).

    I'm the chief geek for a mid sized MSP (circa 90 clients).

    MS have a "story" with hybrid (I hate myself for using that term), and can be so very easy to use for even a small thing like as a file share witness in a cluster (great if you have a single site), as well as a massive hook with Office 365 and licensing. Amazon have development nailed from what my dev department tells me. They tell me that Azure is about 85% feature comparable to AWS with them both being equally easy to use.

    Literally heard nothing about Google Cloud or others outside of the odd SaaS service (Salesforce, one Oracle for a cloudy CRM etc).

    Two horse race, and personally I think it shows the true value of healthy competition. We have at least two very, very good cloud providers to use that continuously try to keep up with each other. I'm no economist, but this looks and feels to me like a textbook example of free market capitalism at work.

    All of that said, I still would rather have business critical infrastructure hosted in a date center we can access on tin that we own. I'm enormously proud that multiple HA Exchange and SfB environments I've designed and implemented over the past 3.5 years have 100% uptime which beats Office 365.

    1. Anonymous Coward
      Anonymous Coward

      Re: Azure vs AWS

      In my segment (telecoms), the talk a few years back was about moving systems at the edge of the core network (SMS, voice mail, OCS and so on) to Azure or AWS. It never happened... The up time simply isn't there yet. What has started to happen is that the networks' own data centres have started looking cloudy in their own right, with suppliers deploying software only solutions.

      1. Glennda37

        Re: Azure vs AWS

        But this is an example of just lifting and shifting applications to the cloud. Applications/platforms should be rebuilt/designed in a way that means components can fail, be spread geographically across multiple regions/AZ's. This is the problem with people complaining about the cloud not working, they are trying to use legacy methods in a new platform and it doesn't work. Services should be designed for failure in mind - check out Chaos Monkey developed by Netflix

        1. Anonymous Coward
          Anonymous Coward

          Re: Azure vs AWS

          Bingo. I am amazed at customers who just want to push a bunch of VMs to the cloud. That is not a cloud, it is a VMware replacement. Application refactoring is required. Microservices are critical for companies to actually see benefits from cloud applications.

          1. Nate Amsden

            Re: Azure vs AWS

            Microservices is a bullshit buzzword bingo with regards to "seeing benefits from cloud applications". What you need to see benefits is higher ability to handle failures at every level (both at an ops as well as dev level), as well as intense ongoing performance evaluation of the product to know how it scales and when to scale. All of these things are incredibly complex to get right for many applications. With intelligent infrastructure the first two are often quite easy to achieve with off the shelf hardware and software(that is typically agnostic to any application stack). The performance testing aspect is complex regardless (depending on application complexity of course).

            That has absolutely nothing to do with micro services. If anything micro services dramatically increases the complexity because now you are having to scale many more individual components and watch what kind of impact of scaling those components has in the other components in the system.

            That obviously doesn't stop people from trying just look how many companies go down when amazon has an outage (or even service degradation) in their U.S. East facilities.

    2. Adam 52 Silver badge

      Re: Azure vs AWS

      "I'm the chief geek for a mid sized MSP (circa 90 clients) ...

      Literally heard nothing about Google Cloud"

      You're not big enough. Google target C-suite at largish organisations with a promise-the-world sales pitch, and then the bosses force it on their techies (not that GCS is bad, although it is a bit peculiar in places). If you're not likely to be spending millions then you won't be on their radar.

    3. Nate Amsden

      Re: Azure vs AWS

      Infrastructure geek here, infrastructure geeks want control over their own stuff (i.e. run in a data center or colo or something), public cloud(IaaS at least) is quite far from that(and based on history will never be that).

      There seem to be fewer and fewer infrastructure geeks around anymore though, just like fewer and fewer good developers around(as a ratio of the whole anyway). The flood gates have opened and armies of mediocrity are displacing the experts at ever increasing rates.

    4. JohnFen Silver badge

      Re: Azure vs AWS

      "Two horse race, and personally I think it shows the true value of healthy competition."

      Having only two serious competitors does not constitute "healthy competition".

  3. Pascal Monett Silver badge
    Coffee/keyboard

    "a cloud provider with a gift shop on the side"

    Brilliant. I almost burst out laughing at that one.

    I will be re-using that.

    1. Anonymous Coward
      Anonymous Coward

      Re: "a cloud provider with a gift shop on the side"

      I wonder if the profits from AWS are subsidizing the gift shop?

      1. JohnFen Silver badge

        Re: "a cloud provider with a gift shop on the side"

        I hope so. At least that way, I'll be getting some kind of benefit from this cloud stuff.

  4. trevorde

    Nobody ever got sacked for buying AWS

    but probably for buying IBM's Blue Cloud (or whatever it is called this week)

  5. Anonymous Coward
    Anonymous Coward

    Azure is kind of a fake out

    I believe Microsoft only sells Exchange Online now. If you buy it, you get on-prem Exchange if you want to use it. I work for a company with 200,000 users. Our Azure experience has been a pure disaster for keeping users synchronized. Microsoft is very lucky the same dolts who bought into Microsoft for years are still in power at these companies. I can't see the next generation of IT leaders still buying this crud. Azure is so immature compared to AWS it is not even close at this point in time.

  6. rmullen0

    Everyone get out your wallets

    And pick your favorite monopolist to give all your money like a bunch of lemmings. The cloud is just a way for billionaires to bilk you. And all the know-it-all IT managers are all too willing to do it. Even when it makes no sense. Why be an owner, when you can be a renter.

  7. Anonymous Coward
    Anonymous Coward

    Amazon Prime prices up 20%

    Ans so the monopoly squeeze of the consumers begins.

    Will tax paid be up 20%?

    Probably but as the saying goes...."half of fuck all is...."

    Wonder what the hike will be next year...

  8. Anonymous Coward
    Anonymous Coward

    Heard it all before

    AWS Cloud = The Choice of a New Generation

    (or Mainframe lock-in for the new generation) :-)

  9. Anonymous Coward
    Anonymous Coward

    Moving Company IT to the Cloud

    Considering that it takes our Company network up to about 20s to load the minimalistic Google homepage onto our browsers, I'm not sure that we quite ready to move everything to The Cloud.

  10. anothercynic Silver badge

    The process company finally monetises its processes! :-)

    The 20-year reinvestment is finally bearing fruit!

    Nicely done, Mr Bezos & minions!

  11. Nano nano

    TYPO alert

    – in a statement attributed AWS' success TO the seven years it had to figure things out before serious competition arrived.

  12. Anonymous Coward
    Anonymous Coward

    Fucking Amazon PRIME, endless nagging -> so NO, I will never ever subscribe

    Everytime I buy items on Amazon.co.uk/de/fr/com, I get this annoying nag-screens - with the little opt-out link to avoid getting into the Amazon PRIME subscription service.

    And Amazon started (like 6 months ago) to mark items as "Only for PRIME members". Unfortunately for me, they are using their recommender system against me, on every second item I am trying to buy, the slap this per customer "Only for PRIME members". Needless to say, if I ask a family member (next to me) to order the item for me, there is no "Only for PRIME members" for the same product at the very same time. FUCKING greedy Amazon. So no, I decided for myself once and for all, no matter what, I will NEVER EVER subscribe to PRIME.

    I will continue to use price comparision websites. Let's hope UK&EU regulated the hell out of Amazon, and split up the quasi-monopoly to save the local businesses.

  13. Anonymous Coward
    Anonymous Coward

    Check your wallets

    Talk to any storage vendor (for instance) and ask them about the customers they've signed up due to Amazon billing practices. There is a long list of Amazon account managers whose sole job is resolving billing disputes. And not small ones. There is a significant flow of ex-AWS customers going back to in-house.

    It's not fraud. It's just incompetence.

    Some customers have to run Google database analysis on their Amazon monthly bills. They are that big.

    AC obviously.

  14. what-where-when

    Why be an owner, when you can be a renter?

    @ rmullen0

    Seems to be the modern world. Look at other things like new car purchases etc - ever increasing numbers of PCP deals. The only thing that seems to be going to other way (a little) is mobile phones with fewer people getting their handset as part of their contract.

    Plus, of course, the bean counters often prefer opex to capex spend.

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