That kind of makes sense, though. The tail risk of something like AWS must to be significant in comparison, so a hefty margin to insure against that seems reasonable.
Sale and distribution of things is probably much milder in its variations, and the expenses seem like they'd be more strongly correlated with revenue.
(All of this is a speculative attempt at explaining the figures, not an authoritative source on strategy. Say I have a 70 % belief.)
Why would the tail risk of AWS be so high? Apart from the economic troubles of COVID which increased online buying, normal periodic economic downturn would be expected to hit all retail businesses fairly hard. Amazon's non retail unit AWS grew significantly throughout the 2008-2010 economic downturn.
I don't know. It feels like the demand from complex software systems would fluctuate more wildly than a relatively predictable human consumer base, but I could be way off the mark.
Sale and distribution of things is probably much milder in its variations, and the expenses seem like they'd be more strongly correlated with revenue.
(All of this is a speculative attempt at explaining the figures, not an authoritative source on strategy. Say I have a 70 % belief.)