Amazon Cloud Revenue Continues To Shoot for the Stars

It's clear: there truly is a silver lining in the cloud for Amazon.

For only the second time in its history, Amazon is detailing how much money it is making from its Amazon Web Service (AWS) cloud unit  -- and once again the figures are staggering.

Amazon reported its overall second quarter financial results on July 23, exceeding expectations. Net revenue was reported at $23.18 billion for a 20 percent year-over-year gain. Net income was reported at $92 million, which is a sharp reversal from $126 million loss reported in the second quarter of 2014.

Looking at the cloud specifically, AWS reported net sales of $1.8 Billion, for a jaw dropping 81 percent (not a typo) year-over-year gain in cloud revenues. For the first quarter of 2015, Amazon had reported AWS revenue of $1.57 billion which was a 49 percent year-over-year gain.

Not only is Amazon selling the cloud, it's actually doing it with a healthy degree of profitability as well. Operating income from AWS for the second quarter was reported at $391 million, up significantly over the $77 million in the second quarter of 2014. In the first quarter, Amazon reported AWS income at $265 million.

Brian Olsavsky, Senior Vice President and Chief Financial Officer of Amazon declined to provide granular detail on AWS customer growth during his company's analyst call. However Olsavsky did note that AWS had a number of large price decreases in Q2 of last year, so it was a somewhat expected but a very strong quarter in AWS.

"From a distribution of customers, it is a global business," Olsavsky said. " We have regions spread throughout the world, we have 11 regions at this point and have announced plans to launch a region in India in the future."

While pricing is a driver for cloud services, Olsavsky emphasized that usage overall of AWS is growing as Amazon adds new services and features to its cloud.

"Innovation is accelerating, not decelerating," Olsavsky said.

He added that in the past year, Amazon has added over 350 significant new features and services to AWS.

"While pricing is certainly a factor we don't believe it's always the primary factor," Olsavsky said. "In fact what we hear from our customers is that the ability to move faster and more agility is what they value."

Sean Michael Kerner is a senior editor at Datamation and InternetNews.com. Follow him on Twitter @TechJournalist

Photo courtesy of Shutterstock.




Tags: cloud computing, AWS, Amazon


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