Grazed from Investors Daily. Author: Reinhardt Krause.
Amazon.com (AMZN) is likely to spin off its cloud computing arm, Amazon Web Services, says Oppenheimer. In a report on the cloud industry released Monday, Oppenheimer analyst Tim Horan says Amazon's cloud computing unit would be better off as a publicly traded subsidiary. "We believe an ultimate spinoff of AWS is inevitable due to its channel conflicts and the need to gain scale," Horan wrote. " We see the business as extremely valuable on a stand-alone basis, possibly even operating as a REIT (real estate investment trust).
"To date, public cloud users, including online retailers, have had few alternatives when utilizing the cloud, other than to fund one of its biggest competitors. New competition will change the dynamic, and with more credible options from which to choose, an increase in the number of defections and/or a loss or pause in market share will pressure Amazon to create two separate companies that are more horizontally segmented."...
