As Target and Walmart Move Away From AWS, How Much Pain Will Amazon Feel?

As Amazon (AMZN - Get Report) moves into retailing of bricks and mortars with the purchase of Whole Foods, it makes sense that Target (TGT - Get Report), Walmart (WMT - Get Report) and other large retailers are looking for another partner in the cloud, rather than help fund a major rival.

Target would have followed the leadership of Walmart and plans to transfer its business to Amazon Web Services. A massive outflow of AWS retailers would benefit competitors such as Google Cloud Platform (Microsoft Cloud (MSFT - Get Report) and Google Cloud Platform (GOOGL - Get Report)). The Amazon cloud trade is so large that it could withstand losses, however. Microsoft, Google and other major cloud players have their own potential conflicts that could cost them business.

Although Target did not speak directly to Amazon Web Services, the company said it used several cloud service providers. "Earlier this year we evaluated suppliers, as we do on a regular basis, and we have determined that there are options that are more appropriate for our business," a spokesman said. "We have decided to implement changes and we have made changes since then."

Similarly, Amazon declined to comment. While the digital commerce giant may have friction with Walmart and Target, Amazon Web Services still has retail customers such as Brooks Brothers Group Inc., GameStop Corp. (GNE - Get Report) and Nordstrom Inc. (JWN - Get Report) and AWS are also using Lululemon Athletica Inc. (LULU - Get Report), Nike Inc. (NKE - Get Report) and Under Armor Inc..

"While AWS remains the 800-pound gorilla in the public cloud market, we believe that its parent's ambitions can begin to have a greater impact on AWS's ability to move to some vertical markets," said Everkite ISI, analyst "Combine it with the growing momentum behind hybrid cloud architectures and we believe that Azure remains well positioned to gain market share in the next few years as it will be considered a reliable partner and capabilities Azure technologies are essentially on a par with AWS in many areas now (if not in some). "

Although the loss of a large account is undeniably bad, John Dinsdale of Synergy Research Group said in an e-mail that Wal-Mart and Target's defections would be "cutbacks" rather than "big events" for Amazon.

Microsoft just made it easier for programmers to use archrival Amazon's cloud

Amazon and Microsoft, two archivists in cloud computing and rigorous competitors for Seattle's technological talent, cooperate much more.

Earlier this week we saw the wedding of Alexa's virtual assistant from Amazon and Cortana from Microsoft.

Then, on Thursday, the companies announced that they were joining together so that programmers could more easily take the code they handle in Microsoft tools and publish it in the Amazon cloud.

On Thursday, Microsoft launched a blog post detailing how its local Team Foundation Server software and its cloud service in Visual Studio Team Services can connect to various Amazon Web Services tools.

Once the new tools are installed, developers can transfer content to the widely used S3 storage service of AWS, automate implementations with the AWS CodeDeploy tool and execute applications with the server service without Lambda server, among others, without leaving the limits of Microsoft products

To build integrations, Amazon engineers have collaborated with members of the Microsoft Visual Studio ALM Rangers group, Microsoft program manager Joseph Bourne wrote in the blog entry. The ALM Rangers group is responsible for providing out-of-band solutions for missing features or guidelines, Microsoft said.

In fact, Microsoft provides a new revenue stream for AWS, the largest cloud around and the top competitor of Microsoft's Azure cloud. This is notable because historically, Microsoft has announced the possibility that people use their source code management programs with Azure.

But if Microsoft is serious about making things as simple as possible for end users, the move is logical.

The opening fits in with Microsoft's recent move led by Satya Nadella to work with non-Microsoft platforms. For example, Microsoft has allowed users to use Linux on their Windows 10 operating system.

Whole Foods acquisition stocks shelves for AWS developers

Purchase of Whole Foods' 13.7 billion Amazon, but could cause a change for developers creating AWS retail applications.

The recent acquisition of Amazon Whole Foods seems centered on adding a new distribution channel for its existing online retail sales activities. But beneath the surface, the real opportunity is to open APIs for a variety of new types of UI retail applications for AWS developers.

The acquisition of Whole Foods could offer an opportunity for developers to work with a completely new mode interface that is perhaps more important than the voice UI user interface. Over the next year, AWS is likely to focus on optimizing and rationalizing back-end logistics. This approach, which would follow the same button pattern as Alexa and Amazon Dash is to develop logistic errors - commands unintentional privacy challenges and new vulnerabilities, among others - while providing functionality in a secure way for the first user. But in this case, the first users are homes with smart devices connected in neighborhoods across the country.

Applications focused on retail

The acquisition of Whole Foods could create a paradigm shift in the way consumers interact with Amazon and other retailers. The detailed UI has not changed much since the advent of barcoding in the Amazon 1990 is better placed to provide a variety of consumer and business-centric applications that enhance the shopping experience in brick and mortar stores, Increase comment, provide new market opportunities and simplify the implementation of new packaging strategies. Examples of these new classes of applications:

Smart recipes

The actual sale received has not changed, except for the minor update delivery via email. This leaves the consumer with a black box of information that says very little about what the total amount of sales represents in terms of real estate. Will toilet or food? Kale or ice? Amazon already offers customers an accurate accounting of their online purchases, and would be a small step to provide the same level of depth to physical purchases. Third-party vendors can take the opportunity to launch applications with health surveillance, analysis and monitoring of nutritional tax categories, which could take into account not only the products but also their ingredients - think of mobile applications like mint and MyFitnessPal On steroids.

Improvement of feedback

For most, User reviews are limited to the purchase of data. Retailers should perform an analysis on the product packaging, product placement and marketing efforts to determine why the products they sell. Amazon could significantly increase the amount of data that retailers can charge their sales through standard APIs. This could even include anonymous emotional tracking capabilities, such as facial Affective analysis. These standardized APIs will offer new opportunities for third-party consumer applications to make improvements in product marketing practices.

New Packaging Strategies

A growing market for the third Foodservice provides packaged food experiences to consumers. These foods range from semi-prepared foods that should be heated only in boxes filled with ingredients of a specific recipe for home cooks. Now, Amazon could provide APIs that allow third parties to build applications for creating recipes and virtual stores, just as they do for physical products. This allows a market of renowned chefs and local connoisseurs to easily sell their best creations.

Amazon has already tested new user interface designs to details around Seattle payments and inventory optimization. The acquisition of Whole Foods could accelerate this process. Developers should be particularly interested in opportunities to create new applications for the future detail user interface that perfectly combine physical and digital channels. In the short term, AWS could create a specific market for such applications and perhaps even create a venture capital fund in the same model as the Alexa program.

AWS goes direct to Canberra

Amazon Web Services makes a more direct route to Canberra with the data center listed newer place of NEXTDC hosting C1 for AWS Direct Connect.

The announcement is a first in the Canberra market and the latest move in the wake of AWS continues to target government and federal public sector organizations.

The service allows AWS customers to establish a secure, private connection between AWS and their own data center environment, office or proximity function.

This feature will be especially attractive to government agencies that oppose the use of the public Internet to access AWS cloud services.

The AWS Direct Connect service can be accessed through a C1 Canberra cross-connect service facility, which is the fourth AWS Direct Connect presence in Australia and the second outside Sydney.

Andrew Phillips, Public Sector Director AWS ANZ, said C1 would play an important role in innovation in providing digital public services.

"The launch will enable our federal and ACT customers to connect through the AWS cloud microwaves and run synchronous replication in separate areas, which will help ensure the secure management of government data - with a high adaptability "Phillips said.

"This will help government agencies to provide better services to Australian citizens, who increasingly rely on digital services for their interactions with government."

The move is also an advantage for NEXTDC as it adds to the portfolio of services the company offers to government agencies as part of the Data Center facilities in the Supplies panel.

The arrival of the AWS Direct Connect presence in Canberra is also good news for AWS non-government customers, new regional companies can now use the full portfolio of services

The launch of the Bega-based regional program and director of AWS 2S software software partner Liam O'Duibhir reported "the immense power of Amazon Services' web services suite," which could be exploited to provide better Communities in the regions.

Amazon.com: AWS - Not The Rivers Of Gold Imagined

NASDAQ with the Amazon.com summary shows that the share price closed at $ 949.04 with a market cap of 453.6 billion and the P / E ratio of 178.39.

The market capitalization of 453.6 billion is 110 times the first quarter of 2011 by Amazon.com Q1-2017, a twelve-month EBIT (TTM) of 4.12 billion.

AWS contributed 77.5% of EBIT Q1-2017 TTM 4.12 billion, which helped keep ongoing earnings growth for AWS vital to Amazon.com.

Investors who buy at $ 949.04 on Monday, intending to hold for five years pending an average return of 10.0% per annum, will sell five to 1,528.44 $ per share. If the expected return on investment is a doubling of the share price, an exit price within five years will be required $ 1,898.08, representing a return of 14.87% per year.

At an expected return of 20% per year, the sale price is $ 2 361.52 per share. However, if the price / EBIT (P / EBIT) ratio should remain at current 110 and provide the outstanding shares remain at 478m, EBIT in five years would only increase by 4.12 billion US dollars. To 6610 million for 10% yield, 8.24 billion for the yield of 14.87% and 10.25 billion for the return on investment of 20% per year. The net profit estimated after interest and taxes for the year 2021, in these scenarios would be between 4 billion and $ 7 billion. Now this level of compensation seems very feasible for this genius online, with a total turnover of 136 billion in 2016. However, there are many "ifs" mentioned above, which means that many uncertainty and increase in Uncertainty equals greater risk. Therefore, investors should definitely look back Amazon.com in the range of at least 10% to 20% and maybe higher.

For performance expectations below 10%, I am sure there are much safer investment options. Stock price gains were averaging over 33% per year between the end of 2011 and the end of 2016, the stock price increasing from $ 179.03 to $ 753.67. From the end of 2016 to May 8, 2017, a further increase of 26% brought the stock price to $ 949.04. I have to ask if there is a quantification of future growth in EBIT would justify stock price increases and the size of the role expected of AWS to contribute to EBIT growth?

Bumper growth for Amazon competitors no threat to AWS dominance

Competitors from Amazon Web Services narrow the gap in the giant cloud infrastructure service provider, recording significantly higher growth in the last quarter, but this does not prevent AWS as the market reached nearly $ 10 billion - with a Growth of 40%.

The new Synergy Research Group figures show that Microsoft, Google, IBM, Oracle Alibaba and all have a "significantly higher" Q1 growth rate than AWS, Microsoft, Google and Alibaba with growth of 80% or more .

However, despite the strong growth of its competitors, Synergy Research claims that AWS remains "in a clean league" with "comfortably large" revenue that every five competitors put together.

John Dinsdale, Synergy Research Group, says the first part of the cloud vendor market now shows a clear stratification with AWS, a group of fastest growing hunters and some other niche players run on Salesforce and Rackspace.

While Salesforce and Rackspace have lower growth rates than other companies, Synergy said both maintain a strong position in their niche markets.

"Beyond these leading companies, the cloud market has a long tail of small and medium-sized suppliers or businesses that have only a minor position in the market, usually based on a specific country or area of application Specific, "Dinsdale said.

"There are decent growth opportunities for some of these smaller players, but it is unlikely to have a big impact in terms of global market share in the world," he added.

Synergy Research estimates the quarterly revenue of cloud infrastructure services, which include infrastructure-as-a-service, platform-as-a-service cloud services and hosted, came "nearly" 10 billion US dollars and Continue to grow at more than 40% per year.

AWS, Microsoft and Google are the leaders in the IaaS / PaaS space, while IBM continues to lead a private cloud offered.

Synergy says the private cloud offered is where Rackspace and some traditional service providers offer more features than the public cloud.

Deep dive on AWS vs. Azure vs. Google cloud storage options

One of the most common use cases for IaaS public cloud computing is storage and for good reason: instead of buying hardware and administering, users simply load the data into the cloud and pay what they put in their place .

It sounds simple. But in reality, the world storing in the cloud has many facets to consider. Each of the top three public cloud providers IaaS - Amazon Web Services, Microsoft Azure and Google Cloud Platform - has a variety of storage options and, in some cases, complicated diagrams for how much.

According to Brian Adler, the company's architecture director at CloudScale, cloud management provider, who recently conducted a seminar comparing storage options in the cloud, there is clearly clearly better than other providers. "Is anyone in mind? It really depends on what is being used (the cloud)," he said. Each provider has its own strengths and weaknesses as the specific use case, he said. Three cases of the most popular use cloud storage and how providers accumulate.

Block storage

The storage drive is a persistent disk storage used in conjunction with virtual machines based on the cloud. Each of the suppliers break their block storage offerings into two categories: traditional dynamic rotating magnetic hard drives or the latest static (SSD) drives, generally more expensive but with better performance. Clients can also pay a premium to get a certain amount of I / O guarantees per second (IOPS), which is essentially an indication of how fast they will back up new log information and read the information stored on it.

The product is called Amazon Elastic Block Store (EBS) and comes in three main flavors: HHD optimized performance, featuring traditional magnetic disc and spinning; General purpose SSD new generation of readers; And provisional SOPI IOPS, which offers a guaranteed rate of read and write data.

The Azure storage offer blocks called managed disks and is available in standard or premium with the latter based on the SSD.

The version of Google called Persistent Disks (PDS), which is in a standard option or SSD.

AWS and Google have 99.95% availability, while Azure offers a 99.99% service level agreement (SLA) for the bulk storage service.

One of the most important factors to consider when buying storage units is the speed with which you need to access the data stored on the SSD. For this, providers offer different rates guaranteed PIO. Google is in the lead; The company offers 40,000 IOPS to read and 30,000 to write in their records. The AWS general purpose SSD offers 10,000 IOPS, but its offering provides the IOP can offer up to 20,000 IOP example, with a maximum IOP of 65,000 by volume. Azure provides 5000 IOP.

Google not only has the highest IOP, but offers customers the widest range in the size of block storage volumes. For a more traditional hard drive based storage, Google offers volume sizes ranging from 1GB to 64TB. AWS offers volumes from 500 GB to 16 TB. Azure offers volume sizes of 1GB and 1TB. As for SSDs, Google offers the highest level of IOP on hard drives by volume in 3000 for reads and 15 000 for writing. AWS and Azure are 500 GPI max. In terms of volume. Azure maximum rates are 60 MB Google 180 for reading and 120 for writing, and AWS 500 MBps.





As for prices, it becomes a bit complicated (all prices are per GB / month), but for HHD, AWS starts at $ 0.045, Google is $ 0.04 and Azure is $ 0.03.

The SSD price starts at $ 0.10 in AWS, $ 0.17 for Google and between $ 0.12 and $ 0.14 for Azure, depending on the size of the drive.

In a price analysis conducted by RightScale, the company found that, generally, the pricing structure means that Azure has the best price / quality ratio for block storage. But, for workloads requiring higher IOPs, Google becomes the most profitable option.

There are reservations when using the provisioned IOPs, says Kim Weins, vice president of marketing at RightScale. In AWS, if you need a guaranteed amount of IOP, it costs a premium. "You pay a higher cost per GB, but you also pay the required IOPs in addition, which results in a higher cost," said Weins. "Be smart about choosing your IOP level supported because you're going to pay."

Weins adds that RightScale found that some customers paid for IOPs and then forgot to unprotect the EBS instance when they finished using it, which cost money.

Storage of objects

Do you have a file that you need to put in the cloud? Object storage is the service for you. Again, cloud providers have different types of storage, classified by the frequency at which the customer expects to access them. "Warm" storage is a data that must be almost instantly accessible. "Cool" storage is more rarely available, and cold storage is an archival material that is rarely accessed. The colder the storage, the less expensive it is.

The primary storage platform for AWS objects is Simple Storage Service (S3). It offers S3 Infrequent Access for a cool storage and Glacier for cold storage. Google has Google Cloud Storage, GCS Nearline for cool storage and GCS Coldline for archiving. Azure has only one hot and cool option with hot and fresh Azure storage drops; Clients must use the cool storage for archive data. AWS and Google each have an object size limit of 5 TB, while Azure has a limit of 500 TB per account. AWS and Google each release 99.999999999% durability for objects stored in their cloud. This means that if you store 10,000 objects in the cloud, on average, a file will be lost every 10 million years, according to AWS. The goal is that these systems are designed to be ultra-durable. Azure does not publish sustainability service level agreements.

Prices on storage of objects are slightly more complicated because customers can choose to host their data in a single region, or at a slightly increased cost, they can save it in several regions, which is an optimal practice for you Ensure access to your data If there is a breakdown in a region.

In AWS, for example, costs S3 (all prices are in GB / month) $ 0.023; To replicate data across multiple regions, costs twice as much: $ 0.046, plus a transfer fee of $ 0.01 per GB. AWS's S3 Infrequent Access (AI) storage service is $ 0.0125 and its Glacier cold storage / archiving service costs $ 0.004

Google has the most similar offers: its cost of storage at a single region costs $ 0.02, while the multi-region is $ 0.026, with a free data transfer. The company's cool storage platform, Nearline, is $ 0.01 and the Cold / Archival Coldline product is $ 0.007. Google states that Coldline's data recovery is faster (in milliseconds) than in Glacier, which according to AWS could take between minutes and hours.

Azure offers one-region storage for $ 0.0184, and what it calls "Global Redundant Storage" for $ 0.046, but it's read-only, which means you can not write changes, which means Costs more. The cool storage of Azure is called Cool Blob Storage is $ 0.01. Azure does not yet offer a cold or archival storage platform, so customers must use the Cool Blob storage for this use case.

Based on these price scenarios, Google has the cheapest storage costs of pure objects plus the free data transfer, RightScale found. However, AWS beats Google's cold storage costs.

Storage of files

An emerging use case is the use of a cloud-based file storage system. Think of it as a cloud-based version of a more traditional network file system (NFS): users can mount files on the system from any connected device or virtual machine, and then read and recover Files. This is a case of relatively nascent cloud storage use and, as a result, offers are still incomplete compared to storage of blocks and objects, according to Adler.

AWS 'offer in this category is called Elastic File Storage, a beta version of June 2016. It allows users to mount files from AWS Elastic Compute Cloud (EC2) or local Using AWS Direct Connect or a Virtual Private Connection (VPC). There is no size limit, so it varies automatically according to needs and offers a throughput of 50 MB per second per TB of storage; Customers can pay up to 100 Mbps throughput. It starts at $ 0.30 / GB / month.

Azure, on the other hand, offers Azure File Storage, of a similar nature, but has a capacity of 5 TB per file and 500 TB per account and requires manual scaling. It offers a throughput of 60MBps to play files.

Google does not have a native file storage offering, but offers the open source FUSE adapter, which allows users to mount files from Google Cloud Storage buckets and convert them to a file system. Google says it provides the highest throughput of the three vendors with 180MBps read and 120MBps on writes. But Adler said in his experience that the FUSE adapter is not as well integrated into Google's cloud platform as compared to the other two offerings, resulting in potentially frustrating experiences with users. Adler also notes that AWS EFS does not have a native backup solution, while Azure does. AWS encourages EFS users to rely on third-party backup tools at this point.

Azure and Google offer lower prices for their file storage systems compared to AWS: Azure is $ 0.80 per GB / month and Google is $ 0.20, but Adler says these costs do not account for Replication or transfer costs. While the AWS base price might seem higher, taking into account all it affects scaling, it could be a wash between the three vendors .