Amazon, one of the world’s largest companies, claimed a 37% increase for its cloud services this Thursday. Unfortunately for the company started by one Jeff Bezos, this is lower than what analysts predicted. That, and Microsoft might even be performing better than Amazon Web Services (AWS) in the cloud department.
Companies Are Investing In Amazon Web Services
Amazon Web Services is the company’s cloud brand, and it helps with storage, computing power, and more for big companies, schools, and even the government.
Their revenue from quarter two went up close to $8.38 billion, which is close to but not as high as the predicted $8.48 billion. However, they’re still above competitors Microsoft, IBM, Oracle, and even Google. That said, as mentioned, Microsoft, who is in second place, might be catching up. The computer giant grew up to 64% in sales for their Azure cloud brand.
However, Amazon Web Services did bring in $2.12 billion in operating income last quarter. This is higher than last years numbers of $1.64 billion, but lower than the predicted number of $2.45 billion, according to FactSet Research Systems.
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Moreover, the company behind Slack, the popular business application for physical and digital workspaces, plans to spend close to $250 million Amazon’s cloud services over the next five years. This is one of many groups looking to invest in the space.
Lyft, the ride-sharing competitor to Uber, will also participate. The company wants to spend over $300 million over the next three years, ending in 2021. Pinterest will do the same, but with $750 million over six years.
In a letter to clients this Monday, Edward Yruma from KeyBanc Capital Markets commented on the AWS investments:
“AWS has benefited from a first-mover advantage in the cloud market and has sustained growth at scale over the last two years. There are few business models at this scale that are still growing 38% y/y.”
13% of Amazon’s revenue comes from AWS, reports CNBC.