Amazon Web Services: The $1 Billion Cloud?
When will Amazon Web Services (AWS) generate $1 billion in annual revenues? That’s the question many analysts are asking ahead of today’s Q2 earnings call. where Amazon.com CEO Jeff Bezos will go over the company’s business highlights in the anticipated $9.373 billion quarter.
In some ways, AWS could become a bellwether stock for investors who are watching the cloud computing market. A Citigroup investment guru told Reuters that Amazon Web Services is likely a $750 million business now — barely a blip on Amazon’s balance sheet. But it could grow to $1 billion by next year as more customers shift to the cloud.
Amazon’s Simple Storage Service (S3), the AWS cloud storage offering, now manages more than 449 billion objects, up 71 percent from the end of last year, according to official figures. And Amazon Elastic Compute Cloud (EC2) was used by 3,674 of the top 500,000 websites in January, almost a 50 percent boost from last year. And despite an Amazon Outage earlier this year, which took down sites like Reddit for entire days, there’s every indication that the business is growing, and some analysts expect it turn out that AWS has better margins than Amazon.com as a whole.
Of course, there are dissenting analyst opinions: Seeking Alpha has a good overview.
Unfortunately, Amazon doesn’t disclose AWS specific financials, so we’re relying on estimates and best guesses. But I have to believe that if AWS hits that billion-dollar high water mark by next year, we’ll be able to tell: you’ll be able to hear the hype from Neptune.