AWS Revenue Grows 46% in Latest Quarter
Amazon reported third-quarter earnings on Thursday. As expected, AWS was the star of the show.
In the period ended Sept. 30, AWS revenue grew a whopping 46 percent year-over-year.
Of the $56.6 billion in sales that Amazon generated in the third quarter, AWS accounted for $6.7 billion. The technology division is among the fastest growing parts of the greater Amazon empire and among its most profitable. AWS is throwing off nearly $1 in operating profit for every $3 of revenue achieved.
If AWS were a standalone company, it would rank among the largest of all of tech companies, generating an expected $25 billion in revenue this year alone.
Little wonder that the Amazon division remains the runaway leader in cloud revenue by a wide margin. According to the latest figures from Synergy Research Group, AWS is the leader in cloud sales, ranked by public IaaS and PaaS service revenues, in North America, EMEA, LATAM and APAC. Overall, it controls nearly 40 percent of the worldwide spending on cloud services.
That’s a big deal to partners, who stand to capture a good deal of the cloud infrastructure services market that’s expected to grow to $81 billion annually by 2023.
While Google and Microsoft have made important gains in recent quarters, AWS remains the company to watch. This includes in terms of business gains and technology advances.
In the quarter, AWS reached several important milestones. Take customer commitments. Among others, Hubspot and Samsung Heavy Industries chose AWS as their preferred public cloud provider. And Yelp announced that it moved its “master database” from its own data center to AWS. Then there was the announcement that AWS made with Salesforce. In September, the two tech giants expanded their global alliance.
In addition, AWS unveiled the Amazon Relational Database Service (Amazon RDS) for VMware. This is a new service that will make it easy for customers “to set up, operate and scale databases in VMware-based software-defined data centers,” according to the company.
AWS also announced progress on the IoT front. During the quarter, AWS introduced IoT Device Defender, which is a fully managed service that helps customers keep their IoT devices safe “by auditing device fleets, detecting anomalous behavior, and recommending mitigations for any issues found,” the company said.
AWS is so chock-full of features that the average service provider may not fully comprehend all of services Amazon brings to bear.
On a broader scale, Amazon’s quarter revenue jumped to $56.6 billion, compared to $43.7 billion achieved one year ago. As for profits, they are climbing, too. For the three-month period, Amazon generated $2.9 billion in net income. Not bad for a company that struggled generating income a mere few years ago. While Amazon is not as profitable as many industry giants, it’s starting to make serious money.
Consider: In its most recent quarter, Apple generated roughly $1 in profit for every $5 that it sold. Amazon, meanwhile, generated approximately $1 in profit for every $20 it sold. For comparison, Ingram Micro generated $1 in income for every $176 it sold.
Translation: Amazon may not be the profit machine that Cisco, Microsoft and Apple are, but it’s rapidly catching up — and then some.