
Follow the CAPEX: Cloud Table Stakes - wiredfool
http://www.platformonomics.com/2017/04/follow-the-capex-cloud-table-stakes/
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jhspaybar
I'm having trouble reconciling him showing Amazon as the lowest spender by far
of the three with their place as largest player by far. Are they just
tremendously more efficient? I wouldn't imagine so given they're all
essentially renting out a physical resource to their customers. Maybe I
misunderstood something about the article?

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cloudwalker
Google and Microsoft's infrastructure supports search (which is vast) and
other workloads beyond cloud infrastructure services.

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throwaway-1209
Is it just me or the "trillion dollar" figure is completely unrealistic? I
mean, even if there are no price wars (and they are inevitable), there isn't
any realistic possibility to capture all of IT spend. With price wars in the
picture, we'll see a race to the bottom which will erase much of the margin,
and make some of the "table stakes" capabilities unprofitable to some of the
players, further cutting into the profits.

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jpatokal
This year's market for IT is around $3.5T, and the pie is still increasing.
Public cloud grabbing a quarter of that by 2020 seems entirely feasible.

[http://www.gartner.com/newsroom/id/3482917](http://www.gartner.com/newsroom/id/3482917)

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crypto5
But "datacenter systems" are only 170B out of 3.5T there..

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sengork
It will be interesting to see the followup article where the author will focus
on IBM and Oracle which are arguably targeting a different market share to
AWS, Microsoft and Google.

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QuinnyPig
This is a personal pet peeve: people classifying the build-out of facilities
as "CapEx."

You can classify portions of your AWS bill as capital expenditure with a bit
of effort, and none of it requires breaking ground on a new facility. It's not
entirely clear how much of that type of maneuvering goes into the underlying
numbers.

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late2part
How do you classify portions of your AWS bill as a capital expenditure?

I'm not familiar with this, assuming your context is as a user of AWS?

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QuinnyPig
Yes, that's the right context.

In short form, you have to go with dedicated tenancy on your instances, 3 year
RIs, and get your auditors on board with it first.

It's not worth the hassle for most shops until they're looking at a seven to
eight figure annual AWS spend.

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hn_throwaway_99
IANACPA, but based on your "In short form" sentence, I guess I see what you
mean and how it could be treated as capex. Still, from a layman's point of
view, it seems sketchy as hell to me in that the primary goal looks to be
making the operating budget look more profitable than it really is if the AWS
spend can be amortized over a couple years.

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QuinnyPig
You're not at all wrong. Changing how things reflect on the income statement
is a bit of smoke and mirrors; it doesn't change the underlying truth, but
does change how they're represented.

It's a weird, weird world.

