Amazon Breaks Out Cloud Earnings

For the first time ever, Amazon breaks out its cloud earnings -- impressing the cloud computing industry in the process.


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Amazon Web Services (AWS) launched the cloud revolution back in 2006, but for the better part of the last nine years, no one outside of Amazon knew how much money AWS made. Now we know.

Amazon's first quarter 2015 earnings call on April 23, for the first time broke out results to provide visibility into AWS's financial performance. Overall for the first quarter, Amazon reported Net sales of $22.72 billion compared with $19.74 billion in first quarter 2014.

Looking at the cloud and AWS in particular, revenue was reported at $1.57 billion for a 49 percent year-over-year gain. Operating income from AWS was reported at $265 million for an 8 percent year-over-year gain. Overall Amazon's AWS in the first quarter of 2015 was working at a 16.9 percent operating margin.

"Amazon Web Services is a $5 billion business and still growing fast — in fact it’s accelerating,” Jeff Bezos, founder and CEO of Amazon.com said in a statement. “Born a decade ago, AWS is a good example of how we approach ideas and risk-taking at Amazon."

During Amazon's earnings call Tom Szkutak, Chief Financial Officer and Senior Vice President at Amazon, commented that AWS has had 48 price decreases since inception.

"The team is doing a terrific job in terms of working on behalf of customers to pass on savings as they see it," Szkutak said.

Price isn't the only factor driving AWS's growth.

"It's probably worth adding that, although prices are a factor, the primary factor for customers choosing AWS is really around their ability to move quickly and to be nimble and agile," Brian Olsavsky, Vice President, Chief Financial Officer of Global Consumer Business at Amazon, said during the call. "So we're very pleased with the kind of continued adoption and usage growth we've seen and obviously the benefits of AWS around their ability – customers ability to be nimble as a primary factor there."

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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