Amazon News: Rivals Bent On Grabbing Lead From Company's Web Services
From the looks of it, Amazon's profit performance is taking a toll on it despite the fact that its lofty profits are making its investors smile from ear to ear. With its good performance, the company has surely caused an alarm to its rivals, which eventually stepped up and challenged Amazon. Indeed, with analysts saying that the company's cloud services is a clay pigeon for other players in the industry, Amazon's shares experienced a temporary setback earlier this week.
Amazon Web Services has gotten the nod of many investors as an avenue for growth opportunity, thanks to its ability to rake in bigger profits as compared to its e-commerce business. True enough, Amazon Web Services experienced a surge in its earnings by almost thrice of the amount it made in 2014, bringing it to a ceiling high of almost $1.9 billion. This impressive performance of Amazon, though, captured the attention of its competitors in the said avenue, especially Microsoft and Alphabet's Google division.
FT reported that Apple had said earlier this month that it is transferring some of its iCloud services to Google's cloud. Spotify is also scheduled to depart from Amazon and transfer most of its offerings to Google as well. While Dropbox is not transferring to Google, it has also announced its departure from Amazon as the online storage provider will now mostly rely on its own system.
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With the exodus of many of Amazon's major clients, it is likely for Amazon Web Services to suffer a major setback in the next three years as its market shares can plunge by as much as two thirds starting now until then, according to Oppenheimer analyst Jason Helfstein. He also made a forecast saying that Amazon will slash its share price by 10 percent following Google's cloud event.
Recently, there were reports claiming that Google is on the hunt for big-name clients that it can brag about for its cloud services. While the amount Google offered to bait in the likes of Apple and Spotify remains unknown, it is safe to assume that the price tag is much lower than that of Amazon's.
