Amazon Web Service Continues to Grow Revenues

Amazon CFO disputes analyst claim that AWS revenue growth is slowing, as he tallies AWS's price reductions and new features.

While Amazon's core business remains its consumer sales, the cloud was a major area of growth in 2015. Amazon reported its fourth quarter and full-year fiscal 2015 financial results on January 28, once again showing the strong impact of Amazon Web Services.

For the quarter, Amazon reported net sales of $35.7 billion, for a 22 percent year-over-year gain. Amazon's full-year net sales came in at $107.0 billion, up by 20 percent from 2014. Looking specifically at the cloud, Amazon Web Services (AWS) reported fourth quarter revenue of $2.4 billion up by 69 percent from 2014.

Amazon only began to publicly report its AWS revenue in April of 2015, during the company's first quarter fiscal 2015 earnings call. For the first quarter, AWS revenue was reported at $1.57 billion for a 49 percent year-over-year gain, in the second quarter AWS reported net sales of $1.8 Billion, for an 81 percent year-over-year gain. In the third quarter Amazon's cloud business reported revenue of $2.1 billion for a 78 percent year-over-year gain.

During Amazon's earnings call, CFO Brian Olsavsky was asked if there was any deceleration in the growth trajectory for AWS revenues. Olsavsky commented that while 69 percent year-over-year growth in the fourth quarter is less than AWS' second or third quarter gains, the business is still growing rapidly. That said, Olsavsky was unable to provide specific revenue guidance target for AWS in Q1 of fiscal 2016.

"We don't give guidance by segment, so we cannot really comment on AWS specifically in Q1," Olsavsky said.

Overall, Olsavsky noted that AWS revenue is on a 10 billion run rate at the end of fourth quarter. That revenue rate is also happening while Amazon continues to lower its prices for cloud services.

"We had a price reduction in January for our EC2 services and it was our 51st price reduction since we launched AWS," Olsavsky said.

While price is important, he added that features and service are too. To that end, Olsavsky emphasized that AWS added a staggering 722 new features and services in 2015.

"We feel we have a lead in this space and we don't take it for granted and we want to serve customers better each year," Olsavsky said.

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 Web Services


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