The last few days have been really interesting watching Amazon get all this love from the media, investors and practically the whole world. The latest one to fall in love is Mr. Morgan Stanley himself, smitten by stunning beauty of Ms. Amazon, as if she was Raquel Welch in “One Million Years”. Morgan Stanley published a 43 page report on Amazon stating why they believe the addressable market for AWS is in fact $240B, “up from $150B” as noted in their 2013 report.
Furthermore, they believe that in the next few years AWS will compete in an addressable market that is a quarter short of $1 trillion dollars. An in the process – they will disrupt VMWare, Microsoft, Oracle, Akamai, and so on. Deutsche Bank has also jumped on the bandwagon stating that “the value of AWS has been pegged at a whopping $160B” due to AWS likely reaching $16B in revenue next year.
We can’t deny that AWS did have a great quarter, however, folks are getting a little ahead of themselves, overreacting and putting Amazon on a pedestal in the clouds. What happens when (not if) Amazon misses expectations? It’s going to be a heart breaker, and having a broken heart kinda sucks. Therefore, its time to re-calibrate expectations.