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A PR/FAQ document to support Amazon's decision on whether to spin out AWS as a separate company
https://github.com/timbray/a-cloud-prfaq

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A PR/FAQ document to support Amazon's decision on whether to spin out AWS as a separate company

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README 

          
# AWS Becomes "A-Cloud", an Independent Entity



### A-Cloud is positioned to address the whole multi-trillion dollar IT marketplace



### Goldman Sachs to lead A-Cloud IPO - launch customers include Walmart and Apple



**[Important: This document is not an Amazon production. It describes a hypothetical

process that could take place, but the author is not an Amazon employee and has no information to suggest that any such process is

in fact taking place.]**



SEATTLE--(Business Wire)--December 1, 2020-- Today, at AWS re:Invent, 

Jeff Bezos and Andy Jassy jointly announced A-Cloud, a new Delaware 

corporation which will assume ownership of Amazon Web Services'

assets and become the employer of existing AWS employees.  This 

will make A-Cloud's services more attractive to customers who

compete with Amazon in one or more market segments, and free

Amazon.com to build custom IT infrastructure where A-Cloud

services don't fully meet its needs. To get started with A-Cloud,

visit [A.Cloud](https://a.cloud).



AWS has become the leading public-cloud provider, offering the widest 

range of services backed by the strongest security, availability,

and data-protection infrastructure.  Now, organizations who compete

with Amazon want to take advantage of AWS's industry-leading 

offerings without having to worry that they are strengthening 

a competitor. 



From the AWS-customer point of view, the experience will be seamless.

All existing AWS services will continue to operate exactly as before wth no 

changes of any kind required in any customer application.



"AWS is one of the Amazon.com creations of which I'm most

proud", said Jeff Bezos. "Its success at improving IT cost,

security, and performance of large and small organizations across

the business, government, education, and nonprofit sectors 

constitutes a major contribution to the way everyone uses technology.

Now it's time for it to spread its wings and address the whole

IT market, end to end and top to bottom."



Andy Jassy, CEO of A-Cloud, said "We owe everything to Jeff's

leadership team, and everyone at A-Cloud joins me in a hearty 

thank-you. Now it's time for our team to work even 

harder at understanding and meeting customer needs across 

the IT horizon."



Following on A-Cloud's IPO, to be managed by Goldman Sachs, A-Cloud 

will acquire all current AWS assets from Amazon.com

for a one-time payment of $100 billion. Also, Amazon.com will receive a 

20% equity stake in A-Cloud. Jeff Bezos has agreed to join the 

A-Cloud Board of Directors, but will not seek nor accept the Chairmanship.



A-Cloud will continue the rapid pace of innovation for which AWS

has been acclaimed, without ever losing focus on delivering

the best security and uptime available from any vendor. A-Cloud

looks forward to serving Amazon.com as a customer, but understands

that Amazon may choose to operate some of its own data 

infrastructure to meet specific needs or location requirements

that would not be well-served by A-Cloud.



"Walmart.com is the world's largest retailer

and has developed an outstanding online-shopping experience" said Doug McMillon, Walmart CEO. "We don't

see online infrastructure as a core competence, and have 

agreed in principle to transfer our applications to run on 

A-Cloud infrastructure. We expect the cost savings to be massive,

without any loss of responsiveness or security."



"Apple iCloud has become an essential part of the customer experience

on iPhone, iPad, and Mac" said Tim Cook, Apple CEO. "We look forward

to relying on A-Cloud services to strengthen iCloud without

any concerns about it competing with Apple in any of our

business segments."



"AWS has served Amazon.com retail superbly for fifteen 

years now" said Jeff Wilke, CEO:Worldwide Consumer at 

Amazon.com. "We're confident that A-Cloud will continue 

to support our retail operations with the reliability,

security, and attention to detail that we've come to 

rely on.  There are a few select areas and geographies

where we plan to build some very Amazon-retail-specific

infrastructure, but for general-pupose public-cloud 

services, we're all-in on A-Cloud".



## External Frequently Asked Questions



**1. What are you launching?**



We are launching A-Cloud, a new corporate entity of which

Amazon.com will be a shareholder but over which it will not exercise 

equity or management control. A-Cloud will assume all the 

assets, operations, and employees of Amazon Web Services.



**2. Why is this good for AWS customers?**



AWS has been scrupulous in declaring and ensuring that

customers own their own data and that it is not accessed

by anyone unauthorized, including any AWS employees.  However, 

some organizations are strategically reluctant to

commit business-critical software and data to infrastructure

owned and operated by an organization whose parent

corporation may be one of their competitors. 



With the arrival of A-Cloud, this strategic concern 

vanishes.  Customers can choose between A-Cloud and one

of its public-cloud competitors strictly on the basis 

of the range, quality, and pricing of the services on

offer. 



**3. Why is this good for Amazon.com?**



As a matter of policy, Amazon.com services are strongly

encouraged to use AWS services, as opposed to 

purpose-built Amazon retail technologies. The cost 

attributed to Amazon.com groups for use of AWS is an 

internal transfer price, and there is room for debate as 

to its fairness both to Amazon.com and to AWS.



Obviously, since Amazon.com will be a large customer

of A-Cloud, it will not be paying list prices. But

the prices will be denominated in real money and

there will be no suspicion that either party is 

accepting an unreasonable deal.



Additionally, there may be certain Amazon.com services

that, for locational or technical reasons, are 

difficult to port to AWS. With the launch of A-Cloud,

Amazon.com gains the option of building and running

its own infrastructure where appropriate, or even 

choosing in some cases to use a competitive public 

cloud provider.



**4. Will AWS pricing change?**



AWS has a track record of regular price cuts. There is

no reason to expect that this will change.



**5. How do I switch from AWS to A-Cloud technology?**



You don't have to do anything.  All the existing 

APIs and endpoints and services will work exactly

as before.

All AWS accounts and billing will work as before.



**6. Why the corporate transaction structure, with the large payment and 20% equity stake?**



Amazon.com has invested hugely in the creation and

growth of AWS.  It is now enjoying a substantial profit

stream which it has fairly earned, and the subtraction

of which might cause financial stress as Amazon.com

continues its focus on customer-obsessed growth.



This transaction gives Amazon.com a large financial

reward, equivalent to several years of AWS profit,

plus a potential long-term reward from

its equity stake in A-Cloud.



Simultaneously, the IPO gives the investing community

a chance to partipate in A-Cloud's demonstrated ability

to grow quickly while operating at a substantial 

positive margin.  



## Internal Frequently Asked Questions



**7. Why are we doing this?**



The connection with Amazon is an increasingly important factor limiting the 

growth of AWS. As a matter of strategy, Amazon continues expanding into multiple markets 

and, whether or not customers *should* worry about their cloud provider being associated

with a competitor, they *do*.  We estimate (see Appendix C) that spinning 

out A-Cloud will increase its projected 2025 revenue from $75B to $110B.



Second, the requirement to use AWS for every purpose in every geography may not always

serve Amazon retail optimally.



Third, all of the large US technology companies are coming under increasing antitrust

scrutiny, and Amazon is no exception.  The use of AWS profits to subsidize Amazon's

drive for growth in many loosely-related sectors of the economy can only aggravate

those concerns.  The independence of A-Cloud will remove one of the key irritants 

in this space.



**8. What will most please customers about the launch of A-Cloud?**



The vast majority of IT people have come to understand the advantages of moving their

app deployments from their own infrastructure to the public cloud, including 

increased agility, world-class security, and reduced costs. Now, when they approach

leadership with the idea of moving to the cloud, they will no longer have to deal with 

fear that they might be empowering a competitor.



**9. What do we want customers to say about A-Cloud?**



"I may not love everything about my AWS bill, but now I'm not worrying about some of

it going to help Amazon compete against me in my own market."



**10. What will customers most dislike about the launch of A-Cloud?**



IT leaders who have serious concern about losing control of their own infrastructure 

will no longer be able to resist moving to the cloud by arguing that this will 

lead to them depending on a competitor.



**11. How do we know that this is what customers want?**



Customers, in executive-to-executive conversations, have been clear that they have

strong concerns about making strategic commitments to a service provided by a competitor.

Walmart has been particularly vocal and has pressured its business partners to avoid

using AWS.



**12. Might Amazon.com use services on Azure or Google Cloud?**



After the launch of A-Cloud, Amazon.com will be perfectly free to make whatever technology

arrangements suits it best. This would be a little bit surprising since Amazon has 

developed a large amount of expertise in using AWS effectively, and retains an 

equity stake in A-Cloud.



However, one can imagine applications which don't need much more than a virtual 

Linux instance, in cases where Azure or Google Cloud has a region in closer geographic proximity 

to a large retail site than any A-Cloud region; in this case, using an alternative service might be a great

choice.