AWS reports sky-high revenues and profit as cloud demand rockets

AWS growth shows Amazon's future is in the cloud

Amazon has reported a soaring rise in Amazon Web Services (AWS) cloud platform revenue in the fourth quarter of 2015 to $7.8bn.

The firm’s 2015 Q4 and full-year financial results show an extra $3.2bn in AWS sales compared with 2014, contributing to a jump in full-year profit from $660m to $1.8bn.

The Q4 profit of $687m indicated the strong performance of AWS in 2015 as the figure was actually higher than the entire profit for 2014 as a whole. AWS also had Amazon’s highest profit margin across all segments of the global corporation.

The sales and profit figures show the reach and appeal of AWS as the cloud platform of choice for numerous companies.

Many cloud services firms bleed their bottom lines with expensive sales and marketing operations, but AWS delivers a solid profit for Amazon.

The infrastructure to support cloud platforms requires large investments in servers, data centres, maintenance and connectivity, and cloud services and platforms are seen as high growth areas that have yet to yield strong profits.

But AWS appears to buck this trend and the financial analysts’ forecasts. Rapidly growing digital services companies like Netflix make use of AWS cloud-delivered infrastructure, and its growth is not likely to slope off in 2016.

AWS is due to open its first UK data centre at the end of the year or early 2017, which will expand its footprint in Europe and increase its potential to win new customers in the region. 

The cloud division is responsible for the bulk of Amazon’s profits, but the company still disappointed Wall Street by missing analyst estimates despite posting its most profitable quarter ever. Such is the obtuse world of financial markets.

Fourth-quarter profit for Amazon was $482m, a third lower that Wall Street’s expectations.

AWS is not the only cloud platform that has seen strong performance over the past 12 months. Microsoft’s cloud services saw rapid growth, and growth of the firm’s Azure cloud platform more than doubled year on year.

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29 January 2016 | 12:14 pm – Source: v3.co.uk

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