Nov. 13, 2014, 11:38 AM
Nov. 13, 2014, 6:36 AM
- Makers of chips that use ARM's (NASDAQ:ARMH) technology aren’t keeping up with Intel's (NASDAQ:INTC) pace of innovation, announced James Hamilton, vice president of Amazon Web Services. "It’s just not quite moving fast enough."
- As a result, Amazon (NASDAQ:AMZN) isn’t ready to start using alternatives to Intel’s chips in its servers.
- Data-center operators are also looking for more efficient components, not just cheaper ones, due to the price of powering and cooling warehouses. "Any time I work out the cost models, it’s not quite there," said Hamilton.
Nov. 12, 2014, 5:55 PM
- At its annual AWS re:Invent conference, Amazon (NASDAQ:AMZN) has launched Aurora, a database solution for AWS clients that the company claims delivers "commercial-grade" performance and reliability (99.99% uptime is claimed) at "1/10 the cost of the leading commercial database solutions."
- Among those solutions, none looms larger than Oracle's (NYSE:ORCL) core database offerings, which (in spite of tough competition from Microsoft and others) maintains an outsized enterprise share.
- As it is, Oracle's database sales have been pressured by a secular migration towards cloud apps, many of which rely on MySQL and other non-Oracle databases. For a price, AWS supports Oracle's flagship 12c database, as well as several rival products.
- Amazon has also launched: 1) Key Management Service, a solution that lets enterprises manage encryption keys for both on-premise and cloud apps/services. 2) CodeDeploy, a solution for quickly having new code go live on multiple AWS computing instances. 3) CodeCommit, a cloud-based tool for managing code revisions. 4) CodePipeline, a service that automates software releases.
- What hasn't been announced yet is a new round of price cuts to counter the ones Google unveiled last week. After Amazon quickly matched a round of Google cuts in March, AWS' main reporting segment saw an unexpected Q/Q revenue drop in Q2; sales rebounded in Q3.
- AWS chief Andy Jassy says his unit now has 1M+ business and government clients, and reiterates its long-term vision. "The vast majority of companies will not own their own data centers in the fullness of time ... All that computing is moving to the cloud. This space is going to be a high-volume, relatively low-margin business."
- Previous: AWS still dominant; Microsoft, Google gaining ground
Nov. 12, 2014, 2:26 PM| 3 Comments
Nov. 11, 2014, 11:03 AM
- Amazon (AMZN +1.6%) announces the six new comedy and drama pilots it will debut on Amazon Instant Video during the 2015 pilot season.
- The lineup will include Cocked, Mad Dogs, The Man in the High Castle, Point of Honor, Down Dog, and Salem Rogers.
- A docu-series pilot called The New Yorker Presents will also be available for streaming.
Nov. 6, 2014, 1:12 PM
- Echo, Amazon's (AMZN -1.1%) latest hardware foray, is a cylindrical, 9.3"-tall device sporting a 360-degree firing speaker, seven microphones, and Wi-Fi and Bluetooth radios.
- In addition to playing back music and Web radio streams, the device integrates a virtual assistant (named Alexa) that can process voice commands, create reminders/lists, and answer queries. Companion Echo apps are launching on Android and (eventually) iOS.
- Notably, Echo is powered by an AC adapter rather than batteries - a sign Amazon is aiming the device at living rooms and kitchens. For now, Echo is only available on an invite-only basis; Prime subs who receive an invite can get it for $99 for now.
- Last week, Amazon launched its $39 Fire TV Stick. Shortly before that, the company announced it took $170M in Q3 charges that were largely related to the Fire Phone.
Nov. 5, 2014, 12:56 PM
- Greenlight Capital made a new "medium-sized" investment in EMC (EMC +0.5%) in Q3, David Einhorn discloses in his quarterly letter. Greenlight took a 2.9M-share position in EMC back in Q4 2013.
- Much like Elliott Management (pushing for a VMware spinoff) and Barron's, Einhorn thinks EMC is undervalued on a sum-of-the-parts basis. He notes EMC's core storage ops are implicitly valued at less than 5x EBIT, and that management "acknowledges that the combined business trades at a discount and has recently committed to trying to address it in early 2015."
- He's much less kind to Amazon (AMZN -1.2%), asserting the company's latest numbers are especially disappointing since they suggest the growth used to justify a dearth of profits is slowing, and in doing so is yielding higher losses.
- Einhorn: "One of the principal bullish assumptions supporting many bubble stocks is, 'the company is growing too fast to be very profitable.' We think AMZN is just one of the many stocks for which this narrative will ultimately prove false."
- Einhorn doesn't explicitly state he's short Amazon, though he does say Greenlight increased its exposure to "bubble basket" shorts in Q3.
Nov. 4, 2014, 3:01 PM
- Google's (GOOG -0.3%) has once more aggressively slashed cloud infrastructure (IaaS) prices in an attempt to gain ground against 800-lb. gorilla Amazon (AMZN -1.1%). Price cuts covers SSD, database, disk snapshot, storage, and networking services, and range from 23%-79%.
- Google, which likely has the most infrastructure scale of any IaaS provider (if one counts its broader Web services ops), has said it wants cloud pricing to fall at a pace equal to Moore's Law; that implies a halving every 18 months. It cut prices in March for both its core computing service (Compute Engine) and other offerings, and more recently gave Compute Engine another 10% cut.
- The Web giant has also launched several new IaaS services today, with a focus on countering Amazon (widely seen as having a feature set lead) by catering to developer needs. The service getting the most attention is Container Engine, which allows users to manage and provision server clusters running Docker containers. Containers act as lightweight alternatives to virtual machines, and are quickly growing in popularity.
- Also launching: 1) Three new network connectivity options meant to improve access to Google's fiber network' Amazon and Microsoft have made similar moves. 2) New features for the recently-launched Managed VM service, which combines the software flexibility of IaaS services with the ease-of-use of the App Engine cloud app (PaaS) platform. 3) Automatic resource scaling for Compute Engine virtual machines. 4) The integration of newly-acquired Firebase's mobile/Web app developer tools.
- Amazon quickly responded to Google's March price cuts, and might do the same this time. Synergy Research recently estimated Amazon still had a 27% combined IaaS/PaaS share in Q3, more than twice that of any rival. Google was ranked #4, behind Amazon, Microsoft, and IBM.
- Meanwhile, Amazon has decided to give Prime subs unlimited cloud storage for photo backups. Before, the feature was only available to Fire Phone users.
Nov. 3, 2014, 3:38 PM
- 11 days after Amazon (NASDAQ:AMZN) disclosed its main AWS reporting segment saw revenue rise 15% Q/Q and 40% Y/Y in Q3, Synergy Research estimates the company's combined cloud infrastructure (IaaS) and app platform (PaaS) revenue share totaled 27% in Q3, still more than 2x that of any rival.
- Nonetheless, competitors are gaining ground. Synergy thinks Microsoft (MSFT +0.9%), which saw 128% Y/Y Commercial Cloud growth in Q3 (covers both Azure and other services), saw its share rise above 10%. IBM (IBM -0.1%), which reported an 80% Y/Y Q3 increase in "cloud delivered as a service" revenue, is assigned a 7% share. Google, Salesforce, and Rackspace are close behind.
- In a PR, IBM states Synergy declared it to be "the #1 hybrid and private cloud provider for the enterprise." Big Blue has committed $1.2B to building up to 15 new data centers from which to deliver IaaS/PaaS services.
- Hybrid clouds are also pivotal to Microsoft's efforts to gain ground against Amazon. Last month, the company unveiled a new hardware platform (to be sold by Dell) that can handle Azure private cloud services, and link with Microsoft's public cloud services to create a hybrid cloud.
- Synergy thinks industry IaaS/PaaS revenue rose 49% Y/Y on a rolling annualized basis, and that trailing 12-month revenue has topped $14.5B. IDC expects public IT cloud services revenue (IaaS, PaaS, and SaaS) to post a 22.8% CAGR from 2014-2018, growing from $56.6B to over $127B.
Oct. 31, 2014, 2:12 PM
- Amazon (AMZN +1.7%) will start labeling promotions on its website as "Black Friday" deals beginning tomorrow.
- The company will offer two deals of the day through December 22 and more than 15K lightning deals.
- Prime members will get the first crack at some of Amazon's promotions.
- What to watch: Most retail analysts and economists have a forecast of 4.0%-4.3% growth for holiday sales which factors in promotional activity at last year's level. Any extra discounting/promotions push from the sector could take sales below estimates.
- Related ETFs:
- ETFs: XLY, XRT, VCR, RTH, RETL, IYK, FXD, IYC, FDIS, SCC, UCC, PMR, RCD, UGE, SZK
Oct. 27, 2014, 3:26 PM
Oct. 27, 2014, 9:19 AM
- The Fire TV Stick is much cheaper than the $99 Fire TV set-top, launched earlier this year. For two days, Amazon (NASDAQ:AMZN) is selling it for $19 to Prime subs.
- Much like Roku's $50 Streaming Stick, the Fire TV stick provides Wi-Fi-based access to numerous Web video sources, and comes with a remote. Like the Fire TV set-top, it supports voice search and Whispersync. Roku, reportedly planning an IPO, maintains an edge in video content support for now.
- The HDMI stick also supports casual gaming - no word on whether it supports the set-top's optional gaming controller - and 8GB of storage. It costs $4 more than Google's Chromecast, which is focused on streaming content from a user's PCs and mobile devices.
- Per custom, Amazon hasn't broken out Fire TV set-top sales. The device has faced tough competition from Roku's cheaper hardware, and Apple's comparably-priced hardware.
Oct. 25, 2014, 4:58 PM
- Shares, -28% YTD, don't look like a good deal yet, Barron's says.
- With investor sentiment waning, shares could trade according to fundamentals over the next year, and those could continue to disappoint.
- Q3 sales hit the "midpoint" of guidance. Under normal circumstances, that wouldn't trigger a selloff, but for Amazon - a stock that trades mostly on revenue growth - "that's terrible."
- Also see: Part Of Amazon.com's Core Is Dying (Paulo Santos, Oct. 24)
- Also see: No One Wants To Hear Anything Good About Amazon, But... (Dana Blankenhorn, Oct. 24)
Oct. 24, 2014, 5:52 PM
- "Investor pessimism doesn’t seem to dampen [Jeff] Bezos’s appetite for risk. Employees unsettled by Amazon’s (AMZN -8.2%) steadily depreciating stock price are probably the only thing that can force Bezos to slow down," writes BloombergBusinessweek's Brad Stone in the wake of Amazon's Q3 miss and soft guidance.
- Stone, who wrote a popular book on Bezos and Amazon, notes declining employee stock grant values caused by investor angst over Amazon's losses could increase employee turnover, something management is unlikely to ignore. Thus, curbing spending (with the goal of boosting Amazon's shares) could go hand-in-hand with keeping needed employees happy.
- How much could lower spending boost profits? In a much-discussed September post, Benedict Evans estimated Amazon's trailing free cash flow would be around $4B (rather than a current $1.08B) if its capex/sales ratio remained at 2009 levels.
- Nonetheless, Evans defended Bezos' strategy: "Amazon has perhaps 1% of the US retail market by value ... Jeff Bezos’s view is pretty clear: keep investing, because to take profit out of the business would be to waste the opportunity ... The question to ask isn’t whether Amazon is some profitless ponzi scheme, but whether you believe Bezos can capture the future."
- The sell-side was in a less forgiving mood today: Two downgrades arrived (from Cowen and Janney), as did a slew of target cuts. Notably, analysts often expressed more concerns about Amazon's top-line growth slowdown (particularly for media and international sales) than its bottom-line pressures.
- Prior Amazon earnings coverage
Oct. 24, 2014, 1:48 PM
- RBC is out with a forecast on which studios will make the most money in 2015 from selling off-network series to SVOD concerns such as Netflix (NASDAQ:NFLX), Amazon Prime (NASDAQ:AMZN), and Hulu.
- CBS Studios (NYSE:CBS) leads the pack at $179M, while Warner Bros. (NYSE:TWX) is expected to bring in $106M and Lion's Gate (NYSE:LGF) about $61M.
- Sony Pictures TV (NYSE:SNE), Fox (NASDAQ:FOXA), and ABC Studios (NYSE:DIS) are pegged to bring in $40M-$43M.
- The overall spend of the top three streamers on older series is expected to rise 31% to $6.8B next year.
Oct. 24, 2014, 9:15 AM
AMZN vs. ETF Alternatives
Amazon.com Inc is an online retailer. The Company sells its products through the website which provides services, such as advertising services and co-branded credit card agreements. It also offerselectronic devices like Kindle e-readers and Fire tablets.
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