After eight years of keeping quiet, Amazon has finally released the financial information about its cloud computing platform, AWS. Turns out it’s been more profitable than initially anticipated, and it looks like it’s only set to grow from here. AWS officially launched in 2006 and today, 1/3 of all internet users visit an application or site that is powered by AWS. In this article we will aggregate the most interesting numbers around the cloud leader, including its infrastructure size and market share.
Revenues and Profits
In the first quarter of 2015, AWS managed to make $1.566 billion in sales, up a whopping 49% from the previous year, accounting for 7% of Amazon’s total sales. In 2014, AWS revenues were $5.16 billion, with Amazon announcing that it had another $6.9 billion tied up in assets. In June, AWS reported that it generated $1.824 billion in total revenues.
AWS’ operating income in Q2 2015 was $391 million, a significant increase from the $77 million it reported for Q2 2014, as well as the $265 million from last quarter. By the end of 2015, revenues are expected to be somewhere upwards of $7 billion.
Leading the Market
Serving 1 million private customers and 600 government agencies, AWS is still the definitive market leader. According to Synergy Research, Amazon, Microsoft, Google and IBM hold 54% of the public cloud’s global market. Nevertheless, Amazon towers above its competitors, leading with 29% of the giant cloud vendors’ share of the global public cloud market. According to Synergy Research, Microsoft, IBM and Google make up the remaining 25%, with 12%, 7%, and 6%, respectively.
Exponential Growth in Services
AWS is growing at an impressive rate. Amazon boasts five times the computing capacity of all rivals combined. 449 new services and features were released in 2014, up from 280 the previous year. At this pace, it is no surprise that AWS’ public cloud competitors find it difficult to keep up with its growth rate and innovation.
There are 11 AWS regions worldwide and more than 30 data centers. Last October, AWS opened their AWS EU-Central (Frankfurt) region and at the beginning of this year, announced that it will open a large region in India in 2016. Every region holds two to five Availability Zones, with less than 1-millisecond latency between them. They are far enough apart for safety purposes and close enough for satisfactory latency.
In his 2014 re:Invent speech, the Vice President of AWS, James Hamilton, disclosed some of the factors that have led the company into the spotlight:
- AWS adds an adequate amount of servers on a daily basis to back the infrastructure demand it had as a $7 billion revenue enterprise in 2004.
- S3 has 132% year-over-year growth in data transfers.
- AWS’ single data center network capacity is 102Tbps.
- A single data center consumes about 25-30 megawatts of power with 50,000-80,000 servers.
Green Data Centers
Three AWS regions are 100% carbon neutral regions: US West (Oregon), AWS GovCloud (US), and EU (Frankfurt). AWS reported that 25% of the power it consumes comes from renewable resources. According to Gizmodo magazine, Amazon founder and CEO, Jeff Bezos, recently announced that an investment was made to run an 80 megawatt solar farm in Virginia. According to Gizmodo, the new plant will be up and running by 2016 and will be able to power 15K US households each year. It’s fair to assume that it will be a dedicated energy source for AWS’ US East, Northern Virginia region.
Amazon’s Stock on the Rise
The e-commerce giant’s Q2 profit amounted to $0.19 per share. A year ago, the company lost $0.27 per share. Analysts are predicting another loss of $0.13 per share. Revenues were better than expected, too, up 20% to $23.2 billion. That was about $800 million more than forecast. According to the New York Times, the biggest contribution to these numbers was AWS.
With these numbers and growth, there is no doubt that Amazon makes long term plans and the investment over the last few years has shown that it’s reaping the benefits. In 2013, Evercore partners forecast that AWS would be worth $50 billion this year and it seems like AWS is heading in that direction. Even with an increase in competition, we can assume that AWS has secured its position as the leader of cloud computing for a while longer.
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