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Just How Big Are Amazon's Cloud Computing Profits?

A competitor says Amazon's margins are likely more than 80 percent.


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In its financial reports, Amazon doesn't break out the numbers for its cloud computing unit, Amazon Web Services (AWS). So no one outside the company really knows how much AWS makes. But at least one Amazon competitor thinks he knows the truth, and he says the company's cloud profits are staggering.

Andreas Gauger, co-founder of ProfitBricks, blogged:

"I calculate ProfitBricks pricing on a regular basis and it’s based on our actual cost and capex including the fact that the cost of hardware is still declining over time just as Mr. Moore predicted it way back in 1965. And sad as it is we are a little smaller than Amazon so I am pretty sure that the prices we pay for hardware, datacenter space or energy are higher than Amazon and the other big players. So here is the deal: if I were to sell our product at the same prices as Amazon or Rackspace does I would have gross margins far higher than the quoted 60% to 80%."

Coincidentally, ProfitBricks announced it was cutting its prices by 50 percent.



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