Revenue increased 47 percent year-over-year as AWS continued to ride the cloud wave in 2016
The importance of cloud to Amazon’s business continues to grow, with Amazon Web Services revenue jumping by a huge 47 percent year on year to $3.5 billion (£2.8bn). Profits rose by nerly 60 percent to $926 million (£740m).
For the whole of 2016, AWS revenue was up from $7.8bn (£6.2bn) in 2015 to $12.2bn (£9.7bn), representing a 56 percent increase. Operating profit growth was even more impressive, more than doubling from $1.5bn (£1.2bn) in 2015 to $3.1bn (£2.4bn) in 2016.
Martin Garner, senior vice president, Internet at CCS Insight commented: “AWS has become the fastest growing area and the engine of profitability for the whole company. Investors will be looking for it to continue its spectacular run, following very good results from Microsoft’s cloud business last week.
“During 2016 Amazon has considerably increased its investment in expanding its services across geographies, building up its logistics and increasing its video content. The company appears to be confident of growing demand and sees no external limits to its growth yet.”
AWS was originally conceived as a platform to support Amazon’s e-commerce activities on which excess capacity could be sold to other companies. However it has since expanded significantly to become arguably the most important part of the business.
The cloud division now operates 42 Availability Zones across 16 infrastructure regions globally and during 2016, it opened 11 Availability Zones across opening across five geographic regions. hese include Ohio in the US, Korea, India and most recently Canada and London. There are plans to open regions in France and China in the coming months.
Amazon also launched 1,017 new AWS features and services in the past 12 months, including three Artificial Intelligence (AI) services and seven new compute services.
Such moves are necessary to compete with other public cloud giants like Microsoft Azure, Google Cloud Platform and IBM Cloud, all of which dominate the sector and have expanded in the past year.