It will come as no surprise to many that cloud computing is an increasingly popular field: research shows that 35% of IT services today are delivered totally or partially by the cloud. Moreover, as this technology continues to innovate, with the growth of mobile cloud services and other new developments, the field is only expected to grow. However, few people seem to realize the financial impact of this increase. Fortunately, this is about to change. In its recent quarterly earnings report, Amazon revealed that its cloud computing business has generated a total of $5.2 billion over the last 12 months. Since this service is so vital to SEO companies and other digital marketing businesses, this doesn’t exactly come as a surprise.
On Thursday, April 23, Amazon posted its quarterly earnings report, which showed that Amazon Web Services has generated $265 million over the course of the first fiscal quarter, up from $245 million in 2014. A collection of remote computing services, Amazon Web Services saw its biggest increase in its cloud computing sector, which generated $1.57 billion in net sales during the first quarter, a 49% raise from the previous year. In all, AWS increased its total revenues from $4.6 billion in 2014 to $5.2 billion in the last 12 months.
“Amazon Web Services is a $5 billion business and still growing fast — in fact it’s accelerating,” Amazon CEO Jeff Bezos stated in a press release. “Born a decade ago, AWS is a good example of how we approach ideas and risk-taking at Amazon. We strive to focus relentlessly on the customer, innovate rapidly, and drive operational excellence. We manage by two seemingly contradictory traits: impatience to deliver faster and a willingness to think long term. We are so grateful to our AWS customers and remain dedicated to inventing on their behalf.”
Launched almost 10 years ago, AWS now provides cloud computing and storage services to more than one million customers. Businesses should make sure to work with trusted web design services, as well. In previous quarterly reports, the service was previously lumped together with miscellaneous services, including advertising and co-branded credit card agreements, a decision Amazon representatives called sensible for the company. This recent release marks the first time the Seattle-based corporation has revealed financials specifically from AWS.
Despite its recent success, however, the company fell slightly behind expert predictions. Analysts from Deutsche Bank had previously estimated that AWS would generate yearly revenues of about $6 million, or about 10 times the expected profits from Microsoft’s cloud computing services. Similarly, analysts at Robert W. Baird and Co., a wealth management firm, valued the business at $40 to $50 billion on a standalone basis, equal to $95 a share. However, this could be due to Amazon’s plan for AWS, as the company has slashed the computing services’ prices 48 times since its debut, as it attracts an ever-growing pool of customers. In November, AWS chief Andy Jassy released charts that listed the business as the “fastest-growing enterprise IT company in the world.”
Other well-known tech companies, such as Microsoft and Google, do not specify exact financial data from their cloud computing services in their earnings report. Microsoft has previously announced that its Commercial Cloud revenue has reached an annualized run rate of $6.3 billion, but this amount might be boosted by its greater variety of technologies and services. Either way, there is no doubt that the cloud computing industry is a competitive business, and that Amazon is establishing itself, at the very least, as a contender for the top.
While the company’s quarterly reports were only recently revealed, Wall Street appears to be responding to good financial news. The company beat stock expectations with $22.72 billion in first quarter revenues and a loss of 12 cents a share. However, as of Friday, April 24, stock had increased around 15% from the beginning of the week.