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Amazon Web Services AWS Generates $1.57 billion in earnings

Amazon Inc. has recently released its first quarter earnings this year. Sales in this quarter increased by 49% more than the previous quarter. Amazon’s stock has gone up to $ 445.10 and this is a good number, but even so, the company stated that they have lost 12 cents per share in the first quarter matching of the consensus. According to Jeff Bezos, CEO of Amazon Inc, Amazon web services are the mainstay of the company to increase revenue. One of the services that play a positive role in income is Amazon Machine Learning.

This Thursday, for the first time, online retailer Amazon reported the financial performance of its powerful growth engine. The numbers looked attractive, particularly when compared with companies like Microsoft and Google that are making strong efforts in the cloud computing and storage segment.

Amazon is mainly known as an online retailer and its revenue and its stock market returns have been increased by a completely different kind of commerce i.e. renting processing power to start-ups and, increasingly established businesses. Earlier, Amazon didn’t share the numbers for its cloud division. Market analysts consider it as a big positive for Amazon and most of the rating agencies have upgraded Amazon stock.

However the other tech powerhouses have since then seen that they were nowhere in a market; the market, which could soon be worth hundreds of billions of dollars. Microsoft, Amazon’s crosstown competitor, is particularly looking forward to make such an achievement, and is in infuriated chase.

At present, there is no competition as Amazon is dominant and also might be expanding its lead. However, the company’s sources are in smaller number than most of its competitors, who have tens of billions of dollars stashed away. The cloud computing mainly requires heavy investment to establish huge data centers around the world.

According to Amazon, its cloud division, Amazon Web Services, had revenue of $1.57 billion during the first three months of the year. The cloud business is generating profit with high margins. The company reported its operating income from AWS to be $265 million. This was beyond expectations of the analysts and its shares increased in after-hours trading by more than 6%.

According to Amazon executives, they look forward to AWS to sometime rival the company’s other businesses in size. The cloud business has been growing at nearly 40% a year, over twice the rate of the overall growth for the company.


This was earnings week in the tech industry, but the one report everybody was waiting for came out on Thursday.

That’s when Amazon broke out detailed financial results from Amazon Web Services, its cloud computing business, for the first time.

That’s when the world discovered that Amazon is making about $1 billion a year on more than $6 billion in revenue from its enterprise computing business — a business that not only did not exist 10 years ago, but that nobody in their right mind would have predicted 10 years ago.

Amazon? The online bookstore that turned into a kind of Best Buy/Wal-Mart online? A giant of enterprise computing? No way.

Amazon launched AWS in 2006 as a way for other companies to host their web applications on Amazon’s machinery in Amazon’s data centers, rather than having to buy a bunch of hardware and software and hire a huge IT staff to keep the whole mess working.

Anecdotally, the tech world knew AWS was a big deal starting around 2010 or so. Every trendy tech startup in Silicon Valley and New York seemingly used it to host their sites — as the rest of the world found out back when AWS used to have its occasional outages.



About Shauna Lehner

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