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The Cloud: Amazon’s Profitable Sideline

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amazon cloud

Revenues in the global cloud infrastructure market hit nearly $11bn in the second quarter of 2017, with industry growth rates at well over 40% per annum, and Amazon Web Services (AWS) has taken a strong lead in this fast-growing business as a sideline to its e-commerce business. AWS provides cloud infrastructure for other companies, and its revenues hit $4.1bn in the quarter to June 2017 out of Amazon’s total $38bn revenue. And it’s a pretty profitable side-line – AWS contributed $916m of quarterly operating profit compared with $436m for its North American e-commerce business and a loss of $724m in its international business. AWS, Microsoft’s Azure and Google’s Cloud Platform are the lead providers in IaaS (Infrastructure as a service) and Paas (Platform as a service) while IBM continues to lead in hosted private cloud. But Alibaba has now become the world’s fourth-largest provider of IaaS, due to strong growth in the China market and expansion abroad, so the market could change quickly.

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