Tag Archives: amzn

Amazon, Google Cloud Services Price War Back On Amid Apple Loss?

A cloud computing price war pitting Google vs. Amazon Web Services could be back on amid Amazon’s customer defections, most notably  Apple ( AAPL ), says Oppenheimer. The investment bank cut its price target on Amazon.com ( AMZN ) stock and lowered its AWS revenue estimates. Oppenheimer analyst Jason Helfstein forecasts that AWS will slash prices for cloud services by 10% after Alphabet ( GOOGL )-owned Google’s user conference Wednesday and Thursday. Some observers speculate that Google could cut prices for its infrastructure-as-a-service offering, in which customers rent computer servers and data storage systems via the Internet. Apple has reportedly shifted some of its iCloud business to Google from AWS. AWS is the  biggest IaaS provider, followed by Microsoft ( MSFT ) and Google. Helfstein says that AWS also faces market share gains by Microsoft’s Azure cloud service. “We believe AWS will reduce prices 10%, vs. 5%  previously, following this week’s Google Cloud Platform event,” wrote Helfstein in a research report. “While AWS is still far ahead of the competition in features and services, as reflected in zero price reductions in 2015, we cannot ignore recent press reports of potential client losses (Apple, Spotify and Dropbox).” The new boss of Google’s cloud business, Diane Greene, will make her debut at this week’s user conference. In November, Google acquired Greene’s startup, Bebop, for $380 million. Helfstein lowered his price target on Amazon stock to 660 from 700. He lowered 2016 and 2017 AWS revenue estimates by 4% and 11%, respectively. While AWS has been the biggest IaaS price-cutter of the last decade, Google has been aggressive since moving into the market. Google slashed prices in March 2014, October 2014 and June 2015. “With no price reductions in 2015, AWS clearly viewed itself in a very strong competitive position. However, this was out-of-sync with the historical trend of 20%-25% annual price reductions and the 45% reduction in 2014 (mostly in reaction to Google),” added the Oppenheimer analyst.

Red Hat Earnings Report Ahead: Amazon A Threat In Linux Landscape?

There’s a notion out there, says Deutsche Bank analyst Karl Keirstead, that Amazon ’s ( AMZN ) flavor of the Linux open-source operating system is about as good as other Linux distributions — and since it’s free and Amazon Web Services (AWS) offers good support, converting is cheap. So does that stand to hurt Red Hat ( RHT ), which reports its fiscal fourth-quarter 2016 earnings after the stock market close Tuesday? “Bottom line, we conclude that the number of migrations from RHEL (Red Hat Enterprise Linux) to Amazon Linux remains quite modest and mostly confined to small enterprise customers,” Keirstead wrote in a research note March 13. “Larger RHEL-centric customers have only a small mix of workloads on AWS, they value OS consistency across their hybrid infrastructures, they prefer support from RHT and/or view the cost savings of a switch as being too modest to be worth the hassle. “These advantages appear to more than offset a view that AMZN Linux is at/near functional parity with other Linux distributions.” Keirstead reiterated Deutsche’s buy rating for Red Hat with a 95 price target, which might take Red Hat a couple of months to achieve if it stays on the same upward trajectory that it’s maintained since bottoming out Feb. 8 at a two-year low of 59.59. On Friday, Red Hat stock closed up 1.9% to 74.09, up 3.2% for the week, 24% above that Feb. 8 nadir, and just 12% off a 16-year high set Dec. 30. Trading above its 50-day moving average, Red Hat stock is still below its 200-day line near 75. But it looks like Red Hat is rebounding firmly from the Software Sag of ’16 that battered many of Red Hat’s rivals and tech players in January through early February. Red Hat stock gets an IBD Composite Rating of 84 out of a possible 99, factoring in earnings, sales, stock performance, institutional ownership and other metrics. Enterprise software developer Salesforce.com ( CRM ) carries an 81, Microsoft ( MSFT ) ranks 76, software giant Oracle ( ORCL ) earns a 61 and SAP ( SAP ) a 70. For its Q4 ended Feb. 29, analysts polled by Thomson Reuters expect Red Hat earnings per share up 9% from a year earlier to 47 cents minus items, matching the company’s guidance. Analysts expect revenue up 16% to $537 million, which also would match the midpoint of the company’s guidance of between $535 million and $539 million, and rival the year-ago sales growth rate of 16%. At those levels, Q4 would be Red Hat’s first quarter decelerated to single-digit growth since EPS flattened at 42 cents in fiscal 2015’s Q3. It would be the 16th consecutive quarter of mid-to-high-teens sales growth. In a research note issued Thursday, Robert W. Baird analyst Steven Ashley warned that Red Hat’s long-term revenue growth in Q4 could have fallen below expectations as seen in historical, sequential long-term growth weakness every three years, going back to Q4 2007. This is due to what he theorizes as three pools of larger deals that renew every three years in Q4, with the most recent cohort in Q4 being smaller than the others. “We believe this nuance (if correct) is truly just ‘noise’ and short-term billings should remain strong,” Ashley said. He models Q4’s total billings growth (long-term and short-term) at a 10% year-to-year improvement vs. the 12% consensus. “Where could we be wrong?” Ashley asked. “Signing a bunch of ‘new’ large three-year deals could augment the smaller renewal pool.” He tipped his hat to Baird’s outperform rating on Red Hat with an 80 price target.      

Apple-FBI Court Case Gets More Comedian-Splaining

Until this week, the only late-night comedian who ventured to explain the importance of the Apple ( AAPL )-FBI battle over smartphone encryption was Seth Meyers of NBC’s “ Late Night .” On Sunday, John Oliver weighed in on the controversy with a funny and informative bit on his HBO show “ Last Week Tonight .” He presented both sides of the case before showing a comical ad his show made for Apple in the company’s signature style. On Tuesday, Apple and the Justice Department will face off in a federal court in Riverside, Calif., over whether the government can compel Apple to hack its iPhone security protections for a criminal investigation. Meanwhile, comedian Remy made a music video parodying the Apple-FBI legal battle to the tune of “ Hotline Bling” by Drake. His version, called “ iPhone Bling ,” was done for Reason magazine. The case also was the subject of online comics by the Joy of Tech and the Onion . America’s late-night comics found other tech industry subjects to mock in addition to the Apple-FBI case. Those targets included Amazon.com ( AMZN ), Facebook ( FB ) and Spotify. What follows are recent jokes from Jimmy Fallon, Conan O’Brien, Jimmy Kimmel and Stephen Colbert. Fallon: Selena Gomez just became the most-followed person on Instagram with almost 70 million followers. When reached for comment, Kim Kardashian said, “I can’t get any more naked, guys. I’ve shown you everything I got.” Fallon: Spotify released a birthing playlist with songs to help women in labor. It includes artists such as John Legend. I guess ladies are like, “Hey, his music got into me this mess. Might as well get me out of this mess.” Fallon: And this is just crazy here. I saw that some researchers at Stanford University have made tiny robots that are modeled after bugs, and found that six of them could actually move a car weighing almost two tons. While two REAL New York cockroaches can actually flip the car over and set it on fire. “Come on – let’s go mug a delivery guy!” Fallon: Amazon just filed a patent for technology that allows customers to “pay by selfie,” where customers can verify purchases by taking a selfie. In related news, the Kardashians just went bankrupt. (That’s all it took!) Conan: It’s come out that Kim Kardashian has paid off Kanye West’s $53 million debt with proceeds from her video game. In case you’re unfamiliar, Kim’s video game is named “Call of Booty.” Conan: A private space company founded by Amazon chief Jeff Bezos plans to send humans into space by next year. Or if they sign up for Amazon Prime, by Tuesday. Kimmel: Facebook has reportedly patented software that recognizes new slang words when they’re posted. The software stores the words in what they call a social glossary while they’re current, then removes the words once they’re no longer popular. I wish Facebook would spend less time with stuff like cataloging new slang and more time trying to stop the monsters who keep inviting me to like their homemade jewelry page. Colbert: Amazon’s got this new voice-activated home assistant gadget called the Echo. You just talk to the Echo, and it tells you the weather or sports scores or controls the lighting or climate in your house. Now, the Echo is always listening, but it only activates when you say its name: Alexa. It’s a pretty name, much prettier than the earlier name, the privacy-destroyer Spy-Mike 5000.