A year or so ago, IT-channel analyst firm Canalys sent the world into something of a panic mode by suggesting that resellers should be very cautious when diving into the reselling of Amazon Web Services (AWS) products and services. Canalys CEO, Steve Brazier, stated that, in his view, no one in the public cloud world is profitable and the public cloud market resembles a pyramid scheme with:
...providers launching services, making promises around performance, winning more customers, building more data centres, adding technicians, and cutting prices to beat the competition.
Canalys went on to state that, at the time, it estimated that AWS lost $2B over the previous four quarters with the parent forecasting losses of between $410 million and $810 million in that quarter. Brazier believed that much of that loss could be directly attributed to AWS.
There was also the suggestion that the public cloud sector could see a financial meltdown. Said Brazier, comparing to public cloud market to the banking one:
...we see the very real potential for a similar crisis in the public cloud market, serious collapses. We have built a business model where there is systemic risk... what happens if AWS goes pop, runs out of cash? A very serious issue. They’ll have to be rescued, bank bail outs or Federal bail outs just like with the banks
The legacy vendors heard the message and riffed on it themselves with a Cisco high-level executive saying that there was a coming crash and that only Microsoft and Google could survive the shake-out.