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AWS revenue jumps 49% in Q1/2018

 

The performance of the AWS remains strong. Already last year was excellent but the current year seems to accelerate the pace.  One year might be too short window to use but the picture is not so different with wider window. In two years the revenue has more than doubled from Q1/2016 and $2.566B to  $5.442B. From cash flow perspective, the impact of the AWS is crucial for Amazon. The quarter was good for Amazon (net income $1.9B in Q1) in particular due to the AWS as it generated net income of $1.4B alone.

It is worth to keep in mind that also other big public cloud vendors have increased their revenues a lot. Cloud market is bigger than ever and there are no indications that it will decrease any day soon. All of that underlines the trend that everyone is relying more and more on cloud based infrastructure. It is easy to point out the winners but where are the losers and how they can survive.  The only way to decrease the impact the is modifications to business models. Selling just capacity is not enough anymore and business models should leverage to new dimension, maybe content.

Amazon itself has studied new business innovations in retail industry a lot and one of the interesting one is Amazon Go.  That is a shop where are not clerks, customers just pick what they like and after they leave the shop they are automatically billed. For customer perspective that sounds fast, simple and convenient way to do shopping. Maybe that is the future…

-Tero

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AWS reached all time high in the Q4/17

AWS performed extremely strongly last year. Once again, they hit the record. The public cloud service providers -in general- performed very well in 2017, all the big players increased their revenues with double digits. Buzz around cloud remains on the high level. It seems that cloud services are not appealing just for certain industry but all of them. Fast paced business environments are more and more depending on dynamic possibilities of x-as-a-service based solutions.

Figure 1. A section from Amazon’s quarterly result

Based on the quarterly result, the income generated by AWS is highly important for Amazon. Just for the last quarter AWS was responsible for income of $1,35B that was a huge part of the total Amazon’s income. Furthermore, AWS generated 1/10 of all Amazon’s net sales in 2017.  If the trend continues, there is a possibility that AWS becomes bigger than SAP within a few years.

What those financial numbers means for the current year? AWS is starting once again the new year from the leading position. 2017 they introduced 1430 new services and features and it is expected that they will introduce even more this year.  It has begun to be hard to find a nice-to-have service that is not provided by AWS. Yet, the trend is to increase the number of managed services and I expect that trend to continue. Who really likes to be able to look under the hood, people just like to ride.

 

-Tero