Amazon's fundamental source of competitive advantage is rarely talked about, but I think this is a great example of what that is -- they have built a company that succeeds in very low margin businesses.

So they started in online retail with < 10% gross margin. With AWS with its ~40% GM they have INCREASED the GM of the company. Contrast this with Microsoft and Google which sell software at 80%+ GM. When they do Azure or GCE, they have to decrease their GM. This is hard! FedEx runs around 60% GM. So just think about what this will do for Amazon ...