Investment Firm Expects AWS Will Hit $20 Billion In Revenues By 2020

http://techcrunch.com/2013/04/14/investment-firms-predict-aws-will-do-as-much-as-20-billion-in-revenues-by-2020-draining-it/

by jamesjyu • 13 years ago

60 24 13 years ago

techcrunch.com

hkmurakami• 13 years ago

For reference, Amazon's revenues in 2012 for the entirety of its business was $51BB.

http://ycharts.com/companies/AMZN/revenues

Too bad we'll never know AWS's margins. It'd be a lot of fun to look at the numbers for Amazon's product portfolio.

epoxyhockey• 13 years ago

Predicting tech more than 2-3 years out is like predicting the weather 10 days out.

dyno12345• 13 years ago

Predicting the weather is easier than that... weather is cyclical.

ShaneOG• 13 years ago

Not in my part of the world! (Ireland)

Usually I bring sunglasses and an umbrella with me each morning, just in case.

cmdkeen2• 13 years ago

But they're not predicting a single piece of tech, they're predicting the success of a platform, which is really Amazon's commitment and engineering capability. You can't predict what features AWS will have in 2-3 years, but you can predict that they'll take a large chunk of the hosting business and how much that is worth. Bezos is committed to this, they have the head start and the engineering chops (or they can buy them in) so I'd say it is a fairly good bet.

OGinparadise• 13 years ago

Investment Firm Expects AWS Will Hit $20 Billion In Revenues By 2020

I expect that Investment Firms Will Keep Making Ridiculous Predictions Even In 2020 And Beyond.

Tech predictions on what will happen 7 years from now in a hotly contested field?

wallflower• 13 years ago

> So one day Jeff Bezos issued a mandate. He's doing that all the time, of course, and people scramble like ants being pounded with a rubber mallet whenever it happens. But on one occasion -- back around 2002 I think, plus or minus a year -- he issued a mandate that was so out there, so huge and eye-bulgingly ponderous, that it made all of his other mandates look like unsolicited peer bonuses...

https://plus.google.com/112678702228711889851/posts/eVeouesv...

NewAccnt2• 13 years ago

Since the writing of this post, AMZN has gone up ~150%.

lostlogin• 13 years ago

The relationship between share price and Amazon financial results has always been a mystery to me. As are Apples.

niggler• 13 years ago

"The estimates reflect Wall Street’s growing confidence in cloud services"

Seems silly to assume that Amazon will take the cake. By 2020 other offerings like Windows Azure may end up taking away the lion's share of profits.

NewAccnt2• 13 years ago

I seriously doubt this. Unintuitively, I think it's more likely that niche cloud services with specialized features will be able to compete better by exploiting industry-specific economies of scale that Amazon can't by being so generalized. Any of these companies that resist a buyout will have huge profit margins like Amazon doesn't.

vosper• 13 years ago

A lot of people are saying the projecting out to 2020 is a ridiculous idea in fast moving industries like tech. But there's already a cliche that when AWS has an outage half of your favourite sites go down, and there's a reason for that - there is NO serious alternative to the AWS platform. They're years ahead of the little competition they have; no single other system does half of the things that AWS can. The scale of the engineering effort required to compete with AWS is enormous, and no-one's really trying it (except for components, like CDNs or S3 substitutes).

So I don't think it's that ridiculous - I can imagine Amazon one day being "that company that runs the internet, and also sells stuff".

troymc• 13 years ago

Who would you say are the main AWS competitors today (at least in part)?

This isn't my specialty, but I suppose the list includes Microsoft's Windows Azure and the Google Cloud Platform. There are some open source efforts to watch as well, including OpenStack (backed by Rackspace and others). No doubt I've missed some.

There's plenty of time for those competitors to catch up to AWS by 2020.

RyanGWU82• 13 years ago

I think the biggest direct competitors are Rackspace, Windows Azure, Google Cloud, HP, and Dell. Indirectly, VMware and OpenStack are huge competitors too. Lots of companies are trying to decide how their existing infrastructure fits in with cloud computing, and the "private cloud" is one likely choice.

None of these have the wide product functionality that AWS has -- yet. Amazon has a multi-year head start on most of these companies, but as you mention, there's lots of time to make progress before 2020.

sgpl2• 13 years ago

>> There's plenty of time for those competitors to catch up to AWS by 2020.

Very true, but this fails to take into account that Amazon will not stay stagnant till 2020 for competitors to catch up.

Because Amazon already have a healthy majority of the users/marketshare, they are perhaps better positioned to understand and innovate upon the future needs of these customers, and keep building their product offerings by anticipating where the "puck is going to be."

With that said, nothing is set in stone, so competitors might as well overtake AWS by 2020, but if I had to bet my money, I'd bet it on Amazon.

old-gregg• 13 years ago

> The scale of the engineering effort required to compete with AWS is enormous, and no-one's really trying

I would suggest that you're wildly misinformed. Not only AWS has plenty of competitors who're silently kicking their butt one area at a time, but even as pure cloud environments go, the value of virtualization continues to evaporate as hardware continues to grow faster than the population.

In other words, theoretically you'll be just able to purchase a single $5K DELL server in a few years and run an Airbnb-sized business on it. As the Moore's law keeps going, it's getting more and more insane for a start-up to invest so much of software fault-tolerance and scaling around AWS-style farms of barely alive virtualized servers from the 90s.

For a lot of businesses even today, a single Dell R720 with a Chef script makes a lot more sense (in terms of uptime, hosting bill and engineering efforts) than a small army of VPS boxes.

If you're not CPU-bound, if you don't need x100 spikes of compute, then you don't need to overpay for AWS-style elasticity, especially in terms of engineering that's required to get stable on it.

jfoster• 13 years ago

One server will never be enough. You need redundancy in case of a fire. Don't forget to optimize kernels, load balance, ensure security patches get applied, etc. I know I don't want that world, so I pay Google a measly amount to run App Engine for me and spin up new instances as my service needs them. I will be very surprised if the future is not bigger and better clouds.

anizan• 13 years ago

Another way to put it. AWS will require $50 Billion in Investments By 2020. Profit potential uncertain. Shareholders not worried.

CurtMonash2• 13 years ago

Amazon will probably have some very strong competitors. For starters, there will be national-champion types, who will prosper due to geo-compliance issues if nothing else. (I.e., rules restricting cross-border data transfer.) Other security compliance will also matter, both pro- (strong enough security) and anti- (government back doors). OpenStack is currently an Amazon fast follower, but that's apt to change, with OpenStack getting some technical advantages as well. And OpenStack is likely to maintain the very big advantage you can move it among providers and hardware configurations, on-premise or off-.

codex• 13 years ago

One flaw with AWS-like businesses is lack of lock-in because of customer churn.

Web site popularity on the Internet obeys a power law distribution--the top sites take the lion's share of traffic and money from the Internet.

AWS will never see revenue from the post popular sites, because once a site grows past a certain size, it's cheaper to build redudancy and host themselves (Netflix, Facebook, etc.). AWS is actually fairly expensive for handling a large stream of traffic--it's only for intermittent use or cash-poor sites that the economics makes sense.

So AWS is full of very small to medium size operations, which are constantly popping in and out of existence. And when a small site pops into existence, it has no legacy cloud APIs to support, and can go with whatever cloud provider has the best offering at that time.

Investment Firm Expects AWS Will Hit $20 Billion In Revenues By 2020

Related Stories