Future Looks Bright for Amazon Web Services
December 11, 2013
It seems Amazon has sprinkled fairy dust on its inability to control costs. ReadWrite informs us, “Amazon Web Services Worth $50 Billion by 2015, and That May Be Too Low.” Writer Matt Asay notes that while other cloud services bring in higher revenue multiples than AWS, Amazon’s strength lies in its long-term strategies.
He writes:
“AWS would almost certainly get a more bubble-esque valuation multiple if it operated more profitably. But as Amazon has done in retail, it generally favors pricing that gives it slim profits but a fat market share. It is pricing for future domination, in other words. So far this approach has ensured rapidly growing revenues, as Macquarie Capital estimates suggest.”
See the article for a graph of those Macquarie estimates. Asay points out that many have rejected the idea that AWS could be wildly profitable, saying that no one would take the service seriously.
The article clarifies:
“That is, serious enterprises would never trust important workloads to Amazon’s Infrastructure-as-a-Service offering, leaving AWS to scrape nickels and dimes off the floor. And yet, if anything, AWS has surpassed expectations, and has demonstrated an ever-increasing relevance for serious enterprise workloads.”
Why? Asay chalks it up to the developers. He points to the growing trend toward cooperation between development and operations departments, which our truncation-loving culture has dubbed DevOps. Amazon is apparently very good at this synthesis, and affording more respect to developers is translating into profits.
Hmm. Perhaps the company can improve its lot even more by extending this respectful attitude to its warehouse workers. Just a suggestion.
Cynthia Murrell, December 11, 2013
Sponsored by ArnoldIT.com, developer of Augmentext
Comments
-
- Subscribe to Beyond Search
Feature archive
News archive
-
