Cloud Computing: Amazon is still playing the dangerous game called ‘race to zero’

Amazon delighted investors on Thursday by posting a rare profit, helped in large part by its profitable cloud computing business, Amazon Web Services.  AWS sales surged 81% over the year-ago quarter, brought in revenue of $US1.82 billion for the quarter and dropped $US391 million of profit to the bottom line, an operating margin of 21.4%, CFO Brian Olsavsky told analysts on the quarterly conference call.

 

So analysts couldn’t resist the question: with AWS contributing so much to Amazon’s new-found profits, will the company keep cutting prices in what the tech industry calls the “race to zero”?  Short answer: Yes…

 

The race to zero is still on, Olsavsky says, because it’s part of AWS’s “business model.”  The “race to zero” is a term for the dangerous price-war game that the biggest cloud computing companies are playing especially Amazon, Microsoft and Google…

Read more from the source @ http://www.businessinsider.com.au/amazon-cfo-the-race-to-zero-still-on-2015-7