At a Glance
Amazon has announced that its cloud service, Amazon Web Services, one of the leaders in the market, has seen a 32% growth in its revenue in the first quarter of this year. This growth is higher than the analysts’ predictions, and it’s an improvement from last year’s fourth-quarter growth rate of 28%.
The Amazon Web Services (AWS) unit brought in $13.50 billion in sales, which was higher than the $13.23 billion average forecasts by FactSet’s analysts. This amounted to 12% of Amazon’s overall sales.
As Amazon’s most stable source of revenue, AWS has become increasingly essential to the company. AWS generated $4.16 billion in operating profits in the first quarter, exceeding the $3.87 billion FactSet consensus forecast and accounting for approximately 47% of Amazon’s total operating income. The operating margin grew to 30.8 percent, up from 28 percent the previous year.
Blake Murray, a Research Analyst at Canalys, said that after the start of the COVID-19 pandemic and the introduction of lockdowns, cloud has emerged as a clear leader in all industries. He added that businesses relied on digital services and being online to keep activities running and respond to the changing situation.
AWS, because of its profitability, plays a significant role in Amazon’s expansion plans. AWS was established in 2006, well before competitors such as Microsoft Azure and Google Cloud Platform. It has grown to become a significant force in information technology, surpassing Oracle and SAP as a top global software provider.
Brian Olsavsky, Chief Financial Officer at Amazon, said, “We have firm confidence that we offer a lot of advantages to AWS customers, from functionality to a vibrant and robust partner ecosystem. And, then really, we also have less downtime and better security, which I think is super important to all of our customers, especially security nowadays.”
Amazon has announced that later this year Andy Jassy, the head of AWS, would succeed Jeff Bezos as the company’s CEO. Adam Selipsky, the head of Salesforce’s Tableau division, would take over AWS. New computing instances based on AWS’s latest generation of energy-efficient Arm-based Graviton chips have been released.