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00:00WENT WELL WHAT DID NOT? CAROLINE: BEZOS CONTINUES TO SPEND. THIS IS WHAT IS A FRONTING INVESTORS AND THE PRICE. AMAZON WAS ON A TEAR LAST YEAR. SALES UP 22%. PROFIT MORE THAN DOUBLED. IT WAS WELL BELOW ESTIMATES, ABOUT 54% BEFORE ANALYST HAD BEEN ESTIMATING BECAUSE THE COST KEPT GOING UP. OPERATING COSTS COME $34.6 BILLION. SALES AT $35 BILLION. THEY REALLY ARE JUST PLOWING MONEY INTO HOW THEY CONTINUE TO EXPAND THE COMPANY. HOW THEY DELIVER TO YOU WITHIN THE SAME DAY OR THE NEXT FEW HOURS. HE IS SPENDING ON FULFILLMENT COSTS. THEY HAVE 50% MORE PEOPLE. THEY ARE PLOWING INTO NEW TERRITORIES, CITIES, PRODUCTS. THIS IS ALL ABOUT THE INVESTMENT THAT JEFF BEZOS CONTINUES TO MAKE. IT IS NOT A GROWING ENOUGH THE SIZE OF THE CHUNK OF BUSINESS TO OFFSET THE PROFIT. ANNA: YOU FOLLOW THE TECH SECTOR. WEIGH IN WITH YOUR THOUGHTS. ARE THEY INVESTING IN THE RIGHT THINGS THAT WILL PAY OFF? >> I THINK THEY ARE INVESTING IN THE RIGHT THINGS. THE OPPORTUNITY IN THE PUBLIC CLOUD IS ASTRONOMICAL. POTENTIALLY A $1 TRILLION OPPORTUNITY. THE AMOUNT OF MONEY THAT ENTERPRISES SPEND ON I.T., HARDWARE OR SOFTWARE OR THE SERVICES COME IS ABOUT $1 TRILLION OUT OF THE $4 TRILLION I.T. GLOBAL BUDGET. THERE IS A $10 BILLION BUSINESS. ANNA: THEY ARE ALSO INVESTING IN SPEEDIER SHIPMENT. >> IN THE ONLINE WORLD IN GENERAL, PROVIDING CUSTOMERS WITH EASE OF USE IN EVERY POSSIBLE WAY IS CRITICAL AND THEY ARE INVESTING IN THAT TWO ENSURE THEY RETAIN THEIR LEADING POSITION. I AM NOT CONCERNED ABOUT THE MISS. 54% MS. RELATIVE -- MISS RELATIVE TO EXPECTATIONS. WE CAN THROW OUT HYPER NUMBERS, BUT IT IS NOT REALLY A RELEVANT WAY TO LOOK AT IT. MANUS: LET US LOOK AT THE CLIMATE INCLUDING MICROSOFT. ON THE BUSINESS SIDE OF THE CLOUT COME UP MORE THAN 70% OF THE FORTUNE 500 COMPANIES ARE NOW USING TWO DIFFERENT MICROSOFT SERVICES. THE BATTLE, AMAZON, MICROSOFT, THEY ARE ALL GOING AFTER THIS NEW HOLY GRAIL IN TERMS OF TECH OR IS THAT OVERSTATING THE POTENTIAL? >> I DON'T THINK IT IS OVERSTATING IT. LOOKING AT THE SIZE OF THE OPPORTUNITY. AMAZON AND MICROSOFT ARE PROBABLY THE BEST PLACED COMPANIES RIGHT NOW. AMAZON HAS A CLEAR LEADS. MICROSOFT HAS ABOUT A $2 BILLION RUN RATE AT THE MOMENT OUT OF THEIR $9 BILLION IN OVERALL CLOUD BUSINESS. I JUST WONDER, IF YOU ARE A CORPORATE AND YOUR USED TO USING MICROSOFT PRODUCTS AND YOU'RE MAKING A DECISION ABOUT WHETHER TO MOVE TO A PUBLIC CLOUD OR NOT, DO YOU PREFER TO GO WITH YOUR ESTABLISHED VENDOR, MICROSOFT, OR DO YOU GO WITH AMAZON WEB SERVICE. I THINK MICROSOFT MAY START TO GARNER SOME LEAD. I THINK MICROSOFT MAY TURN OUT TO BE THE VENDOR OF CHOICE. ANNA: THIS IS THE KEY QUESTION AROUND MICROSOFT. CAN THE CEO REVIVED LISE GROWTH -- REVITALIZE GROWTH? CAROLINE: THE SHARE IS UP 25% LAST QUARTER. HE RESOLUTELY BET ON THE CLOUD, ON THE FACT THAT YOU CAN REACH UP TO BUSINESS. MANUS: THEY BELIEVE IN HIM. THEY BELIEVE IN THE STORY OF HIS TURNAROUND. CAROLINE: AND ON THE COST-CUTTING DRIVE THAT THE CFO IS PURSUING NOW. THE OTHER WINNERS FROM THE CLOUDS. WHAT OTHER BUSINESSES BENEFIT BY OUR MOVE TO THE CLOUT? --TO THE CLOUD? >> INFRASTRUCTURE PROVIDERS, IT INTEL WOULD BE A GOOD EXAMPLE OF THAT PROVIDING DOMINANT PROVIDER OF CHIP SETS FOR THE CLOUD. AS THE SOFTWARE COMPANIES. SOME OF THE SOFTWARE COMPANIES ARE SERVICE BUSINESSES. I MIGHT TAKE UP THIS POINT AGAIN ABOUT MICROSOFT. I DO THINK IT IS IMPORTANT TO SEE HOW WELL THEY HAVE DONE IN TERMS OF THEIR DRIVE IN TERMS OF REALIGNING THE BUSINESS WHICH HE HAS DONE SUCCESSFULLY AS WELL AS THEIR COST-CUTTING. HIS COST-CUTTING PLAN IS VERY MUCH WORKING. THE STORY IS INTACT. ANNA: IS THAT YOUR TOPIC IN THE SECTOR AT THE MOMENT? >> NETWORKING AND THE CLOUD. MICROSOFT AND AMAZON WOULD BE THE CLOUD WORKERS AND NETWORKING WOULD BE GOOGLE AND FACEBOOK. ANNA: THANK YOU VERY MUCH. MANUS: WE'RE GOING TO TAKE A

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Amazon Misses on Spending, Microsoft Grows on Cloud

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