Amazon owns the biggest public cloud to date, Amazon Web Services (AWS). It is the most veteran, reportedly running about a third of the world’s public cloud infrastructure, and some even say it’s bigger than the sum of all of its major competitors, including major players such as Google and Microsoft.
But how big is it actually? Up till now Amazon hasn’t disclosed its figures on its AWS business, reporting it under “Other” on the financial reports. But that’s now changed.
On its financial reports yesterday Amazon for the first time disclosed the explicit portion of its AWS unit, which shows a yearly run rate of $5 billion, and growing fast! The quarterly results of $1.6 billion show 50% increase year-to-year. On its statement, Amazon founder and CEO Jeff Bezos said
Amazon Web Services is a $5 billion business and still growing fast — in fact it’s accelerating
Those who were debating how profitable it could be, with the aggressive price cuts Amazon has been employing, would be surprised to see Amazon reports an operating margin of nearly 17%. Quite impressive I’d say. And putting the rest of Amazon’s business in the shadow. If AWS were its own company, that would make a very strong player…
Microsoft also reported its cloud business, quoting $6.3 billion yearly. However, careful examination shows that this category doesn’t only include the Azure cloud business (which would be the equivalent of Amazon’s AWS) but also its other hosted services such as Office 365, and CRM. Microsoft hasn’t released figures around its operating margins to see how profitable the business is there.
These impressive figures show the size and growth of the cloud services business, and a glimpse at what’s we’re expected to see in coming years. Cloud is not only here to stay, it’s hear to take over IT, especially with the adoption of popular DevOps tools such as Docker.
And cloud doesn’t end with providing mere infrastructure (IaaS, Infrastructure-as-a-Service). On one of my last posts I covered the fierce fight between the cloud vendors on big data & analytics, a hot topic these days. Another hot is the Internet of Things (IoT), which Amazon, Microsoft and others are targeting. These higher-level services, commonly known as Platform-as-a-Service (PaaS), will ultimately enable constructing full offerings organically in the cloud, will free IT companies to focus on their core business value, and will enable lean start-up companies to jump in and bring innovation without need for major up-front investments.
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