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Amazon At War

Is Amazon's cloud play becoming gloomy?  Amazon, specifically Amazon Web Service (AWS) is in an out war with for the cloud with Google, Microsoft, and many, many others and it doesn't look as though these pressures are going to ease up any time soon.  Indeed everyone has or is (late bloomers) is getting into the cloud and of course, cost savings by having your own data servers is quite the enticement.

A quick look at the facts.

AWS sales dipped this quarter as Amazon announced Thursday that for its second quarter that the category that includes AWS saw a 3% sequential revenue slip. That “other” category — which also includes advertising services and co-branded credit card agreements — also logged 38% growth year over year which sounds fantastic until you realize year-over-year growth in the first quarter was 60%. There have been other slight quarterly dips in the category’s otherwise relentless rise over the past few years, but they’ve mostly happened between fourth and first quarters.

One must consider a shift in the behind-the-scenes action:

Moz Dumps Amazon Web Services, Citing Expense and ‘Lacking’ Service

Privately held,Seattle marketing technology company Moz new CEO Sarah Bird had blunt criticism of Amazon Web Services (AWS), which she says the company is leaving for reasons of cost, product stability, and service.

Add to this the fact that Zynga and Sony moved out of AWS years ago.  Now additional news is starting to leak that another company (Dropbox) has joined the move out of AWS.

A source familiar with Dropbox’s current strategy said the company lately has been moving more of its IT infrastructure away from AWS and onto its own turf. There are now 10,000 servers in Dropbox facilities running loads that had been on Amazon EC2, although it’s not clear what percentage of Dropbox’s computing requirements that represents. Dropbox is currently storing data both in its own data centers and on Amazon S3 until the end of the year, this source said.

Clearly it appears there will be further further pressures in AWS’s future.  The bottom line:

So as rival public cloud powers add services and cut prices, and as more customers see the benefits of hybrid as opposed to pure public cloud computing, expect the pressure on AWS to ratchet up.

Of course it's Amazon's general merchandise retail sales represents 65% of it's market cap however after reporting a larger-than-expected loss (a loss I should say "once again") one has to wonder if investors are growing tired of the waiting game.  Tired of waiting to see a profit in what is considered such an innovative company.  Let's face it; robots and drones are cool but after a few year, even Clara Peller would ask, where's the beef?

Hat tip Greenm3.com

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