How Much Can Amazon Profit From The Cloud?

Grazed from Seeking Alpha. Author: Chris Frangold.

For large Internet-based companies like Amazon (AMZN), building and using its own cloud service just makes sense. Not only does this cut back on the added expense of outsourcing, it also gives the company total control over how to manage the service.

In a very short amount of time, cloud computing has redefined how companies work with each other and with customers. Since 2006, Amazon has offered its cloud service, Amazon Web Services, to the public. Now the company has plans for expansion, which could increase profits and allow Amazon to make its mark in yet another high-profile arena…

Cloud-Based Services

Providing cloud-based services to other businesses seems like a natural progression for companies like Amazon. And while other well known companies like Google (GOOG), Hewlett-Packard (HPQ), and Microsoft (MSFT) offer cloud services, Amazon has built a reputation for customer satisfaction that’s difficult to beat – even for a search engine superpower like Google. This means that Amazon doesn’t have to advertise its cloud services on a regular basis like other companies. If a business already relies on one of the company’s other services, it will probably sign up for AWS at some point or vice versa…

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