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Amazon’s AWS Conundrum

Amazon Web Services is by far the dominant cloud computing company, so far leaving rivals like Google and Microsoft in the dust. As it gets bigger, the question of whether it fits within Amazon.com is likely to loom larger.

Breaking apart Amazon would be complicated, for various operational and financial reasons. It likely isn’t something Jeff Bezos has any inclination to do. A more plausible move might be for Amazon to sell a stake in AWS in a public offering, to both raise cash and focus investors on the value of the cloud computing unit.

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A compromise might be for Amazon to sell a minority interest in AWS in a public offering. Morgan Stanley recently put a value on AWS of $63 billion. Selling 10-20%, say, could raise $10 billion in cash, which could be helpful for AWS’ expansion. And it would allow Amazon to retain control.

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Joe Lonsdale
Joe Lonsdale
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Ruchi Sanghvi
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There’s little doubt some big potential customers in the retail and e-commerce sectors avoid AWS because it’s controlled by a competitor.