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Business Management

AWS by the numbers: Huge, accelerating, profitable but still opaque

When they finally came, the numbers were remarkably consistent with predictions made by analysts. Amazon CEO Jeff Bezos hailed his “accelerating” business and gave numbers for the last full financial year, pegging the company as “a $5bn business”. This is erring on the cautious though: for its first quarter AWS drew nearly $1.6bn in sales, up almost half on the previous year, so AWS for the 2015 financial year could yet be a $7bn or even larger unit. Margins are impressive too: 17% on a business Amazon bosses have always characterised as tight and highly price-competitive, helping to generate $265m in operating income.

These are truly remarkable figures. While comparing AWS to others in the cloud platform sector is difficult because it’s a wide berth covering many different types of hosted compute, storage and networking activity, there can be no doubt that AWS is the market leader and is surely well clear of its most similar rivals like Microsoft and Google. Others like Rackspace and IBM-SoftLayer will pursue significantly different markets.

But questions remain. Amazon’s AWS reveal was more tease than full disclosure for those who want forensic detail. We don’t know the full size of its vast datacentre assets, all aspects of spending to maintain leadership, perception of competitive risks or plans to compete in adjacent markets. Could AWS for example begin to compete more on the cloud applications side where rivals are stronger, or in private clouds? As more quarters follow, analysts will be able to get better visibility on AWS’s progress.

One thing is clear: just as with the Amazon’s Everything Store retail business, the company is shooting for the stars, investing heavily today for gravy tomorrow. You get the feeling that, for all its current scale, the Everything Platform is still being built out.

See also:

AWS’s Werner Vogels seeks IT pain relief as he builds the Everything Store

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Martin Veitch

Martin Veitch is Contributing Editor for IDG Connect

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