The company is now completely dependant on a business you do not always associate with selling books.
For those who came in late, Amazon has not been making any profit announcements lately and prefers to invest in new cunning plans.
Last week it announced a profit, but said it was all due to its cloud business.
Revenue from Amazon’s cloud – Amazon Web Services (AWS) – nearly doubled in the second quarter, showing the business was poised to drive sustainable earnings for the online retailer, Wall Street analysts said.
It is still not more than the company’s product sales but the figure is a huge chunk of sales.
Amazon has effectively cleaned everyone’s clock in the cloud business, including names which have more experience in running those sorts of operations. EMC, IBM and even Microsoft have fallen by the wayside when it comes to market share. Last year Google tried to enter the market with limited success.
While analysts have been touting the huge profits to be made on the cloud, the last year has seen a price war between all the key players. Now while prices are still low, costs are more or less on a parity.
All that competition left Amazon with five times more capacity than those of its next biggest 14 competitors —i ncluding Google — combined.
Analysts are starting to call Amazon the “Walmart of the cloud” for its prices and just-good-enough service.
Amazon is in the same position that Microsoft was. Its cloud has become so dominant, and popular with developers who do not see a need to learn to use any other technologies.
As a result Amazon has the chance of controlling the public cloud, just like Windows controlled the PC environment for a long time.
The only way for its rivals to beat Amazon is on technology. Last year we saw some interesting stuff from EMC hit the shops, but competition against something that settled is hard work no matter how technologically superior – remember OS-WARP?