Amazon Web Services

This is the first article of a short series in our more recent dive into AWS. Ultimately, we attempt to understand the durability of Amazon Web Services' cash flow.

We will be exploring 3 areas that we feel are particularly interesting and somewhat less-well covered.

This first piece is centred around the growth in Kubernetes and the risk that open source technologies could commoditise Amazon's EC2 and S3 services.

In the second piece we explore how and why Amazon created Graviton, its proprietary ARM-based core processor, and the potential competitive advantage of being fully vertically integrated.

Finally, we will attempt at breaking out the ROIC and unit economics of both AWS and 'non-AWS' as it's reported by Amazon.

Kubernetes & The Portability Illusion

In the early 2010’s, just as AWS was gaining mass adoption, investors feared infrastructure as a service could become commoditised. The logic was that companies could easily switch their virtual machines between public cloud providers.