Of course a lot of software goes into making AWS work. Is AWS a software business or a hardware business though? It certainly lets me get away from hardware. But I don't think that's true for AWS itself...

I mean, this conversation can keep going - I'm not really interested in digging in deeply to find the answer, because I don't think there's anything meaningful to be found. But I do object to scratch-the-surface level analysis like "Amazon is a valuable company these days, I guess the innovation happening in software outpaces all other fields of research combined" or "AWS makes most of Amazon's profit these days, which makes Amazon a software company".

Amazon might be a software company, but it might not be; it might be a logistics company, a consumer electronics company, a retail company, a data analytics company, a media company, a server farm company... it's not enough to say that AWS makes the most money, thus it's a software company.

>For starters, Amazon derives most of its profits from AWS.

Amazon has over $200B of revenue from e-commerce, $1 Profits. AWS Generate ~$25B revenue, $1M Profits.

Here is the headline. AWS ( Its Cloud Division ) Generating 1 Million times more profits than Amazon Retail!.

Or AWS Generate more profits than all of other Amazon Department combined!

What this mean is that Amazon is a vertically integrated Retail company ( Where Retail here includes Online ), with logistics, and transportation. Amazon is mostly software / AWS is a Silicon Valley / I.T / Tech view bubble.

Forgot to mention AWS is actually lots of hardware, land cost for DC, etc. i.e Not Software.

> Forgot to mention AWS is actually lots of hardware, land cost for DC, etc. i.e Not Software.

Cool, yeah, so you're saying if I go buy a bunch of servers and land I too can compete with AWS? It doesn't matter what software it runs?

The hardware and datacenter stuff is commodity. Table-stakes. Everyone has to have it. That's why they don't even manufacture the servers themselves. Software is where the value add is. This goes for any cloud provider, BTW.

That reasoning could be used for everything and hence Apple is not a Hardware company. And it doesn't change the fact majority of Amazon revenue does not derive from Software. And should not be valued as such.

Apple designs and manufactures (albeit through contracting) their products from the silicon up. People who buy Apple products care about the hardware as well as the software. Nevertheless I agree with you, Apple isn't a pure-hardware company and the market doesn't value them like that. Their P/E ratio is 20-22, roughly in the same ballpark as Google or Microsoft (higher 20s)

People who use AWS don't care about the metal that it runs on, as long as it does the job.

> Amazon revenue does not derive from Software. And should not be valued as such.

Ok. But it is (I think - I don't know that much about valuations). If you're certain that's wrong, you shouldn't be arguing with strangers over the Internet, you should be off making money from that insight.