Elon Musk continues to be a disruptive force in the tech sphere. Even if he’s a bit of a troll when it comes to his tweets, he isn’t playing games when it comes to Twitter profitability.
That first meant he made everyone who wants to have a blue check to pay him $8 a month, and now it means that he’s taking on Amazon the tech behemoth to try and get out of tens upon tens of millions of dollars in server hosting fees.
Specifically, Elon is fighting with Bezos to fight his way out of roughly $70 million in server hosting fees that were negotiated under Twitter’s past leadership, which was significantly less competent or business-minded than Elon.
And that $70 million is just the start. Amazon Web Services (AWS) constitutes some, not all, of Twitter’s cloud-based operations and completed a five-and-a-half-year deal in 2020 worth over $500 million. Twitter also signed a $1 billion dollar contract with Google for similar hosting services.
The fight between Elon and Bezos is escalating as Elon seeks an out, with Bezos’s AWS reportedly refusing to pay Twitter its ad revenue so long as Twitter withholds payment for server hosting. The fight apparently started after Elon pushed Twitter into transitioning to Google for its hosting needs. Breitbart, reporting on that, said:
Twitter agreed to pay $510 million over the course of the agreement, and it was anticipated that Twitter would transfer its primary hosting to AWS. But since Twitter now makes greater use of Google Cloud, this never happened. Twitter’s $1 billion, five-year contract with Google is currently still active, despite the company’s efforts to cut costs associated with its Google Cloud usage.
Breitbart also noted that if math is the only concern for Elon, then the roughly $1 million in ad revenue that it might lose from AWS withholding payment is much less than the $70 million cost of the contract. However, Elon could face a contract claim in court which would likely end up costing legal fees plus the $70 million. More likely, perhaps, is that Elon is hoping to get the total cost cut down so he doesn’t have to pay the full amount.
Continuing, Breitbart noted that the fight over server space comes as Elon has cut cost by firing huge numbers of IT and software staff, something that has come at the cost of occasional outages. Reporting on that, Breitbart said:
Since Elon Musk bought Twitter, there have been a number of significant outages. Musk has cut back on server capacity, closed one of Twitter’s three U.S. data centers, and fired IT and software staff who kept the service operational. According to reports, this has seriously disrupted the platform, and many users are dissatisfied with the persistent problems.
However this plays out, watching two of the world’s richest men compete for internet dominance is fascinating, particularly considering that they are both also competing with each other to build their own rockets and space programs.
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