Curious Hair wrote:
Joe Orr Road Rod wrote:
Does Amazon turn a profit? Or will their profit come when they are the only retail business left?
Amazon loses money on the retail side and makes faaaaaaat stacks on the CDN side.
yep, taking a somewhat recent quarter (Q4 2017):
Quote:
While the numbers from Amazon's e-commerce operations were impressive,
the cash cow remains Amazon Web Services. Consider:
Amazon's North America e-commerce business delivered fourth quarter operating income of $1.69 billion on revenue of $37.3 billion.
International e-commerce sales were $18.04 billion with a operating loss of $919 million.
AWS had operating income of $1.35 billion for the fourth quarter with sales of $5.11 billion.
For the year, Amazon's international e-commerce operating losses eclipsed the company's North American operating profit. AWS had 2017 operating income of $4.33 billion on sales of $17.46 billion.
In other words, on an annual basis all of Amazon's operating income derives from AWS.https://www.zdnet.com/article/all-of-am ... -from-aws/Amazon sorta stumbled into AWS (Amazon Web Services).
Eschewing their fellow Seattle-ites MS products, Amazon from the beginning built an internal *nix-based IT infrastructure to handle internal IT tasks/running Amazon.com.
Eventually they realized they could scale up their internal IT infrastructure and sell off the excess capacity at a tidy profit with minimal effort.
They already had the devops systems in place to automagically spin-up new capacity on demand. The containerization/docker/kubernetes revolution of the last few years has only made that process cheaper/easier/more profitable; while skyrocketing demand for cloud-based IT infrastructure hosting like AWS or Google's Firebase competitor or even Microsoft's Azure offering.
Once people get comfortable with using virtualization/containers within their own IT departments, on their own hardware, it makes a world of sense to stop buying expensive-but-short-of-life and costly-to-maintain-and-host hardware every year and simply off-load your IT infrastructure to the cloud.
Bonus: once you stop buying and maintaining your own hardware, you can fire the neckbeards you were paying six-figures + benefits to write/babysit clunky bash/powershell scripts to keep the network and "boxes" up.