Amazon Seeking 2nd Headquarters: Canadian Cities Pitch Interest

[geotag277]

Originally Posted by casper

As for the data centre. Not certain there is a long term market for these general purpose cloud systems. Business are increasing turning to the software company that supplies their apps to supply the application in the cloud. At that point why would most of these companies have any interest in general compute resources. The only people that still will are software houses.

If your Microsoft, Oracle, Facebook, SAP, Sabre, Expedia, dropbox, airb&B, ..... why would you chose to deploy on AWS vrs Microsoft vrs owning a bunch of servers in a data centre.

Currently AWS and Azure benefit from people who buy software independently of the hosting and need some place to deploy it onto.

In my experience, very large scale enterprises typically use a mix of cloud providers to provide their services, to mitigate outages and reduce general risk. In essence, they will use MS + AWS. Netflix is famously "all in" into AWS. Airbnb is currenlty a heavy user of AWS, and dropbox only recently migrated to their own infrastructure - a decision which may come to bite them as AWS is constantly getting cheaper and the cost to running your own cloud services with associated support and keeping up with technology is expensive unless you are at the scale of AWS. Even the US government is leveraging whole hog to cloud infrastructure.

In any case, running your own will increasingly not make any sense, as AWS scales and provides cheaper and cheaper offerings while account for a broader range of use cases (and microsoft realises throwing money around to gain marketshare is not a long term strategy). This will make sense for everyone from independent developers to large scale enterprise.

Unless of course CEOs can justify spending large amounts of cap ex, operating costs, and so on, to re-invent the wheel in a worse less reliable fashion.

[1overcosc]

The Canadian government is moving to cloud too. It costs a fraction of what it costs to have your own servers.

[casper]

Originally Posted by 1overcosc

The Canadian government is moving to cloud too. It costs a fraction of what it costs to have your own servers.

Perhaps it is changed. But about two-three years ago, the Federal Government had moved to building three or four very large data centres that would house their provide cloud infrastructure.

Companies like Bell Canada, Telus, SaskTel, Shaw, Frontier Networks, Cogeco (Peer-1) tend to have these massive networks of data centres scattered all over. They interconnect with each at Front St in Toronto and Harbour Centre here in Vancouver. I could be wrong, but I just don't see Amazon displacing those operators.

[Corndogger]

Originally Posted by geotag277

In my experience, very large scale enterprises typically use a mix of cloud providers to provide their services, to mitigate outages and reduce general risk. In essence, they will use MS + AWS. Netflix is famously "all in" into AWS. Airbnb is currenlty a heavy user of AWS, and dropbox only recently migrated to their own infrastructure - a decision which may come to bite them as AWS is constantly getting cheaper and the cost to running your own cloud services with associated support and keeping up with technology is expensive unless you are at the scale of AWS. Even the US government is leveraging whole hog to cloud infrastructure.

In any case, running your own will increasingly not make any sense, as AWS scales and provides cheaper and cheaper offerings while account for a broader range of use cases (and microsoft realises throwing money around to gain marketshare is not a long term strategy). This will make sense for everyone from independent developers to large scale enterprise.

Unless of course CEOs can justify spending large amounts of cap ex, operating costs, and so on, to re-invent the wheel in a worse less reliable fashion.

Where are you getting this info from? It doesn't match up with reality at all.

Watch the video on this page and honestly tell us that Microsoft is not spending big bucks to be a major player in this market.

https://www.thestreet.com/story/1441...microsoft.html

Then there's this which clearly states that things are far from being over for Amazon's competitors.

However, when looking at application workload distribution between different IaaS providers, a slightly different trend emerges. According to a recent Cloud Security Alliance (CSA) report (Download a free copy of the report here), Amazon Web Services is the most popular public cloud infrastructure platform, comprising 41.5% of application workloads in the public cloud. While Amazon has long been viewed as the dominant provider of public cloud infrastructure, Microsoft Azure is gaining ground quickly in application workload.

Azure currently holds 29.4% of the installed base, measured by application workloads. Google Cloud Platform trails with 3.0% of application workloads followed by IBM SoftLayer, Rackspace, and a long tail of providers that comprise another 20.7% of the market. The scope of long tail provider usage is surprising, and may indicate the market is still at an early stage of maturity.

Source: https://www.skyhighnetworks.com/clou...th-amazon-aws/

[WhipperSnapper]

Originally Posted by geotag277

Ali baba's "global foothold" is irrelevant if that really just means "China + peanuts". Let them have china, who cares? It's not an even competitive landscape and they can be handed that market on a silver platter by the chinese government.

That isn't innovation and that isn't threatening to Amazon.

Assets? Revenue? Net income? You are misunderstanding Amazon as everybody does. Amazon is a growth and investment story. If it were up to Bezos Amazon would have zero net income - they would be fully reinvesting to maximise current value of future cash flows.

The fact that their net income has gone up at all is indicative they are maxing out investment in future cash flows.

You will find this line in every single letter to shareholders:

There's no point continuing. I'll just conclude that Alibaba is more than just China + peanuts.

What you're prescribing is exactly the bubble that I have been saying all along. There's literally hundreds upon hundreds of tech companies selling the same thing. Nevermind the 50/50 shot at putting everything on black. It's impossible for each one or even half to reach their potential. People will lose regardless if Amazon miraculously gets through unscathed. I will agree net income is less important however Amazon's growth in valuation and expectation of reaching a trillion dollars by next year is crazy for the gross revenue and assets between now and then. It's all speculative through stock manipulation. A good analogy is the Vancouver housing market that I know is another one of your interests. It's a purely growth and investment story too.

We're moving too far from topic too. This thread is about jobs and office space. The last time Microsoft peaked at about a 600 billion market cap only to fall to a 300 million market cap when the rug got pulled out. They actually fared very well all things considered. It wasn't any good for high paying jobs or bustling office space that is enticing governments to act all stupid with this Amazon lottery.

[geotag277]

Is AMZN overvalued right now? Complex question. Based on my fundamentals analysis to estimate both PVFCF/FCF my calculations show they are undervalued. Based on AMZN being a historically misunderstood stock investment, I would expect perhaps a serious dip at some point on the near term horizon. AMZN isn't about short term, they are long term. Do you think their failed AMZN Phone investment had potential to totally tank them? They had 25% shaved off their stock price. It didn't matter. AMZN continues to take big bets attempting to optimise their PVFCF. I expect they might have another high profile failure which investors will punish. Good, the stock will go on sale for a short time (like San Fran housing in 2008).

AMZN might not be the first stock to a trillion dollar evaluation, but they will be the first ones to justify it based on fundamentals (FCF + growth).

All that said, if you don't understand a company, you shouldn't invest in it, period. IF you didn't understand Vancouver's unique conditions which drove the price increases, you shouldn't have invested. In either case, you are gambling.

While no company has the long term prospects of AMZN, MSFT and Walmart are also good shorter term investments, because you don't have to be #1 in a field to make money hand over fist and beat earning estimates (lucky for them).

[casper]

Originally Posted by Corndogger

Where are you getting this info from? It doesn't match up with reality at all.

Watch the video on this page and honestly tell us that Microsoft is not spending big bucks to be a major player in this market.

https://www.thestreet.com/story/1441...microsoft.html

Then there's this which clearly states that things are far from being over for Amazon's competitors.

However, when looking at application workload distribution between different IaaS providers, a slightly different trend emerges. According to a recent Cloud Security Alliance (CSA) report (Download a free copy of the report here), Amazon Web Services is the most popular public cloud infrastructure platform, comprising 41.5% of application workloads in the public cloud. While Amazon has long been viewed as the dominant provider of public cloud infrastructure, Microsoft Azure is gaining ground quickly in application workload.

Azure currently holds 29.4% of the installed base, measured by application workloads. Google Cloud Platform trails with 3.0% of application workloads followed by IBM SoftLayer, Rackspace, and a long tail of providers that comprise another 20.7% of the market. The scope of long tail provider usage is surprising, and may indicate the market is still at an early stage of maturity.

Source: https://www.skyhighnetworks.com/clou...th-amazon-aws/

My point is I don't think IaaS is a long-term play. Slowly non-software companies will stop buy the technology. They are going to buy software hosted in the cloud by the software company. The software companies (like Microsoft) are going to be more likely to own their own equipment. Getting back to buildings...... There are places like these all over the country and most of them are not owned by amazon.

• Video Link
https://www.youtube.com/watch?v=ryY9...ature=youtu.be

These data centres end up in places like Oregon where electricity is cheap. The temperature is mild.

Back to the topic at hand....

For a tech company the concept of HQ2 is somewhat weird. You would expect a tech company like this to be able to work with a geographical distributed workforce with ease. The facts they already have thousands of people in Vancouver and Toronto perhaps is an indication.

[WhipperSnapper]

Originally Posted by geotag277

Is AMZN overvalued right now? Complex question. Based on my fundamentals analysis to estimate both PVFCF/FCF my calculations show they are undervalued. Based on AMZN being a historically misunderstood stock investment, I would expect perhaps a serious dip at some point on the near term horizon. AMZN isn't about short term, they are long term. Do you think their failed AMZN Phone investment had potential to totally tank them? They had 25% shaved off their stock price. It didn't matter. AMZN continues to take big bets attempting to optimise their PVFCF. I expect they might have another high profile failure which investors will punish. Good, the stock will go on sale for a short time (like San Fran housing in 2008).

AMZN might not be the first stock to a trillion dollar evaluation, but they will be the first ones to justify it based on fundamentals (FCF + growth).

All that said, if you don't understand a company, you shouldn't invest in it, period. IF you didn't understand Vancouver's unique conditions which drove the price increases, you shouldn't have invested. In either case, you are gambling.

While no company has the long term prospects of AMZN, MSFT and Walmart are also good shorter term investments, because you don't have to be #1 in a field to make money hand over fist and beat earning estimates (lucky for them).

No matter what you're analysis concludes (and, no offense, but your understanding of the Vancouver market housing leaves me very suspect) it is still all speculative with very little oversight. PVFCF/FCF are fallible and the experts telling you to buy or sell are not impartial.

The bubble I'm suggesting is larger than AMZN. A setback here nor there is irrelevant. Those high paying jobs and leased office space is larger than Amazon. There's a hundred rising Fintech companies in Toronto. Good luck if even a fifth or those lead somewhere.

[TorontoDrew]

If you think you know who will get the new HQ you can bet on it here http://www.oddsshark.com/other/amazo...ting-prop-odds Nashville is the leader, Toronto is near the bottom but it's ahead of Boston.

[casper]

Originally Posted by TorontoDrew

If you think you know who will get the new HQ you can bet on it here http://www.oddsshark.com/other/amazo...ting-prop-odds Nashville is the leader, Toronto is near the bottom but it's ahead of Boston.

The one I find surprising Miami being at the bottom. I have always had the impression that Miami was a favorite with US corporations for having corporate branch offices that manage Latin America operations.

It offers another dynamic to an HQ2 for a large multi-national.

[Loco101]

Originally Posted by casper

The one I find surprising Miami being at the bottom. I have always had the impression that Miami was a favorite with US corporations for having corporate branch offices that manage Latin America operations.

It offers another dynamic to an HQ2 for a large multi-national.

Probably better and cheaper to manage Latin American operations from Mexico than from Miami.

[geotag277]

The "Latin America gateway" angle is mainly for finance and a few very specific brands (ie Telemundo). There is no real reason for a company like Amazon to be swayed by the Latin America angle.

[geotag277]

Originally Posted by WhipperSnapper

The bubble I'm suggesting is larger than AMZN. A setback here nor there is irrelevant. Those high paying jobs and leased office space is larger than Amazon. There's a hundred rising Fintech companies in Toronto. Good luck if even a fifth or those lead somewhere.

That's kind of the way tech works - there are always bubbles bubbling around. In 2005 it was social networks, in 2006 it was video sites, etc.

In 2017 there is a lot of attention on crypo-currencies (for good reason).

If anything I'd say Toronto is a bit behind on fintech start ups and investment compared to New York, considering each is the financial capital of their respective countries. Of course most start ups (and investments) don't go anywhere, that's kind of the game.

The nice thing about fintech is that it has a lot of potential to actually make money and prove it's value in rather obvious straightforward ways. Either the technology works and you make money or it doesn't. Compare that with the tech investment patterns of the past and it's an improvement.

[SpongeG]

Careful what you wish for — Amazon HQ2 could make Toronto's existing problems worse

The city was elated when it made the short list, but winning the prize risks making unaffordable housing, gridlock and brain drain even worse

Claire Brownell
February 2, 2018
3:03 PM EST

In November, San Francisco’s homeless residents living near a pet adoption clinic in the Mission District got some 400-pound, beeping, whirring new neighbours courtesy of the Society for the Prevention of Cruelty to Animals.

Frustrated by repeated break-ins and vandalism, the organization had posted robot security guards outside its building. The SPCA has denied intending to harass the homeless people camping nearby, but harass them the robots did, recording their activities on video and causing some to move their tents because of the noise and surveillance.

The robots quickly became a symbol of San Francisco’s inequality problems, which many blame on the growing number of high-paying tech giants in the city. Those companies have brought massive economic growth to the region, but also skyrocketing rents, worsening gridlock and a growing homeless population.

There is good potential to make Amazon actually work in Toronto if the terms are negotiated early on, if it's not a carte blanche

Abdullah Snobar, executive director of the DMZ

Those problems, experts say, may befall Toronto if it ever succeeds in becoming the location for Amazon.com Inc.’s second headquarters, a competition that in January was narrowed down to 20 possible sites, including Canada’s most populous city.

Local public officials were elated by the news and no wonder — the prize is 50,000 jobs and US$5 billion in economic investment, in addition to much-coveted international validation as a “world-class city” — but others wonder whether the negative side effects experienced by fast-growing tech enclaves such as San Francisco will be worth the win.

Those unpleasant consequences are not necessarily inevitable, but experts say avoiding them would take a combination of careful planning and quick action on the part of the city.

...

http://business.financialpost.com/te...problems-worse

[casper]

Originally Posted by Corndogger

Where are you getting this info from? It doesn't match up with reality at all.

Watch the video on this page and honestly tell us that Microsoft is not spending big bucks to be a major player in this market.

https://www.thestreet.com/story/1441...microsoft.html

Then there's this which clearly states that things are far from being over for Amazon's competitors.

However, when looking at application workload distribution between different IaaS providers, a slightly different trend emerges. According to a recent Cloud Security Alliance (CSA) report (Download a free copy of the report here), Amazon Web Services is the most popular public cloud infrastructure platform, comprising 41.5% of application workloads in the public cloud. While Amazon has long been viewed as the dominant provider of public cloud infrastructure, Microsoft Azure is gaining ground quickly in application workload.

Azure currently holds 29.4% of the installed base, measured by application workloads. Google Cloud Platform trails with 3.0% of application workloads followed by IBM SoftLayer, Rackspace, and a long tail of providers that comprise another 20.7% of the market. The scope of long tail provider usage is surprising, and may indicate the market is still at an early stage of maturity.

Source: https://www.skyhighnetworks.com/clou...th-amazon-aws/

Interesting Forbes article on the Cloud Market, it shows Microsoft at the front and IBM and Amazon second.

https://www.forbes.com/sites/bobevan.../#29c35dc1dc1a

IBM has a massive presence in Canada, especially in Toronto, Ottawa and Vancouver. In the case of Microsoft they have a significant R&D presence in Vancouver. Perhaps they are a better bet and investment that trying to chase after the Amazon Second HQ.

[Corndogger]

Originally Posted by casper

Interesting Forbes article on the Cloud Market, it shows Microsoft at the front and IBM and Amazon second.

https://www.forbes.com/sites/bobevan.../#29c35dc1dc1a

IBM has a massive presence in Canada, especially in Toronto, Ottawa and Vancouver. In the case of Microsoft they have a significant R&D presence in Vancouver. Perhaps they are a better bet and investment that trying to chase after the Amazon Second HQ.

This point from the article is worth noting.

The narrative—and it is dead wrong—repeated relentlessly and tirelessly by many in the media and amplified by some analysts that Amazon is the runaway winner in the cloud is baseless, sloppy and terribly misleading. In the IaaS space exclusively, yes indeed, Amazon's AWS unit is the big cheese. But as the publicly available numbers shown throughout this article and within the embedded graphics reveal, Microsoft is the overall leader in the enterprise cloud, Amazon sits below Microsoft in revenue, and IBM is just barely behind Amazon. It's time for that long-running string of extremely fake news that "Amazon rules the cloud" to come to an end.

Looks like Geotag fell victim to fake news. To declare a "winner" in a sector that is growing as rapidly as the Cloud Market shows a total lack of understanding of what's going on and what the various players have to offer. The MSM is pretty well clueless when it comes to stuff like this and obviously so are some analysts.

[1overcosc]

Except IaaS is what matters these days, so...

[Corndogger]

Originally Posted by 1overcosc

Except IaaS is what matters these days, so...

Really?

From the same Forbes article.

Microsoft is all about the hybrid cloud, and it's a subject that CEO Satya Nadella returns to relentlessly, citing his company's success in the cloud as being due to its creation of aggressive deployment of its architectural advantage in seeing no big difference between on-premises technology, cloud technology, and edge technology. In the end, Nadella said, it is Microsoft's job to make it easy for customers to move across all three with grace and speed, and to be able to exploit the full power of AI in that mega-environment to yield increasingly valuable data. That's why Nadella is my runaway pick for CEO Of The Year.

Amazon is doing terrific work on many fronts, and were it not for Microsoft above it and IBM just behind it, Amazon would deserve all the hosannas the media loves to lavish upon its cloud business. But reality often intrudes on rickety narratives, and if Amazon wants to remain a top-tier cloud powerhouse, it must increase its presence in the higher-value realms of PaaS and SaaS.

[geotag277]

So funny when non tech people comment on tech. Why would you include office 365 revenue in microsoft's cloud revenue component? You might as well include Amazon's online shopping platform and Google's search engine - they are after all "cloud run anywhere" based. What's the reasoning for excluding those, yet including office 365?

I am always amused by these comments from people who have some tribal connection to a company, as Corndogger seems to have with microsoft. Keep rooting for your boy, we'll see in 10 years if the coveted "PaaS" sector is the right place to invest.

[casper]

Originally Posted by geotag277

So funny when non tech people comment on tech. Why would you include office 365 revenue in microsoft's cloud revenue component? You might as well include Amazon's online shopping platform and Google's search engine - they are after all "cloud run anywhere" based. What's the reasoning for excluding those, yet including office 365?

I am always amused by these comments from people who have some tribal connection to a company, as Corndogger seems to have with microsoft. Keep rooting for your boy, we'll see in 10 years if the coveted "PaaS" sector is the right place to invest.

The reason for including Office 365 is that a company has a choice. It can go buy Exchange and SharePoint licenses then get IaaS from Amazon (or whoever) and setup its Exchange and SharePoint server. Alternatively it gets the correct Office 365 subscription from Microsoft with all that bundled in.

IBM Watson is their big analytics application. It runs on Power processors and other specialised hardware. The user could have purchased a $500,000 piece of hardware to run it on premise if they wanted to or they just pay IBM for they time they need it spun up for them.

Getting back to the HQ2 point. Amazon is not as dominant a player in everything it does. Yes, it is a force not to be ignored. Stats show over 95% of goods sold in Canada are still going through the Bay, Sobeys, Walmart and all those traditional retailers. Perhaps Canadian cities should be going after all those HQ2 instead of focusing on Amazon.