Deutsche Bank analyst predicts AWS 2017 valuation of $160 billion (£104bn) on 2017 revenues of $16 billion (£10.3bn)
Amazon’s cloud computing business Amazon Web Services (AWS) has been heralded as the “fastest-growing enterprise technology company in history” in a note by Deutsche Bank.
Penned by Deutsche Bank analyst Karl Keirstead, the note predicts that AWS will hit revenues of $16 billion (£10.3bn) in 2017, meaning it could have a valuation of $160 billion (£104bn).
“We conclude that a 2017 revenue multiple of 10x seems fair for AWS, which given our 2017 AWS revenue estimate of $16 billion implies a valuation of $160 billion,” the note said.
“Measured by revenues, AWS is approximately 6x larger than its biggest rival Microsoft Azure and is arguably the greatest disruptive force in the entire enterprise technology market today,” the note stated.
It was in its most recent quarter that Amazon’s cloud business grew a whopping 78 percent year over year, hauling in $2.1 billion in revenue. Profits stood at $521 million in the last quarter.
These estimates from Deutsche Bank put AWS up there with the legacy giants. IBM currently stands at a valuation of $160 billion, whilst Oracle is at $170 billion. Considering these are whole companies in themselves, a division of Amazon which has only been operating since 2006 is no small feat.
“While Marc Benioff of Salesforce is an icon in the software industry,” it said, “Andrew Jassy of AWS keeps a relatively low profile and in our view may be the world’s most under-appreciated technology company head.”
But at this year’s annual AWS conference in Las Vegas, Jassy came out of his shell to speak to press.
“Every large technology company in the world is marching fast now to try and build a copy of what AWS has built,” boasted Jassy.
“That is not a surprise to any of us at AWS or to somebody that has worked on the business from the very start. We always expected there to be a lot of companies pursuing it.”
Earlier this year, IDC analyst David Bradshaw told TechWeekEurope: AWS has kept its pace of innovation high, continuously introducing new types of services and extensions to existing services, and I expect that we will see continued strong revenue growth in the company’s public cloud services in Europe as a result.”
But the note also complimented Microsoft Azure, Microsoft’s own public cloud offering. Keirstead said that Microsoft is the number two in the cloud infrastructure market, with estimated annual revenue of $1.4 billion.
But Azure, which accounts for around 2 percent of Microsoft’s whole revenues, has a long way to go before catching up with AWS.
Bradshaw told TechWeekEurope: “There is no shortage of competitors in the IaaS market, and some competitors have recently been growing even faster than AWS. However, they all have a long way to go before they can present a serious challenge to AWS’s market leadership.”
In October at its annual Re:Invent conference, AWS unveiled a raft of new services that it hopes will help it keep in front. They included an Internet of Things platform called AWS IoT, a physical storage box called Snowball that helps companies move massive amounts of data physically, and new instances for “demanding enterprise workloads”.