AWS secures $9.95bn in Q419 revenues to beat expectations – and maintain market share

James is editor in chief of TechForge Media, with a passion for how technologies influence business and several Mobile World Congress events under his belt. James has interviewed a variety of leading figures in his career, from former Mafia boss Michael Franzese, to Steve Wozniak, and Jean Michel Jarre. James can be found tweeting at @James_T_Bourne.

Amazon Web Services (AWS) posted revenues of $9.95 billion (£7.59bn) in its most recent quarter, beating analyst expectations.

The results represent a 34% increase on Q418, while the full-year figure, of $35bn, are 36.5% up on 2018. The third quarter saw revenues of $8.99bn, with AWS contributing 11% of Amazon’s total pot, a figure remaining conistent with previous quarters.

As with previous quarters, Amazon does not go in for self-aggrandising prepared remarks, with chief financial officer Brian Olsavsky again taking questions. Most of the questions were on the subject of AWS and wider growth patterns.

“As we see it here, we grew from a $30 billion revenue run rate at the end of 2018 to a $40bn revenue run rate at the end of 2019 – so we continue to be happy with our top line growth,” said Olsavsky. “We had a larger dollar increase in revenue both year-over-year and quarter-over-quarter – so we’re very happy with the progress of the revenue and our adoption and acceptance by customers.”

The three letters of AWS saw a grand total of 68 mentions in the press materials. This represented a downturn from 79 this time last year. Many of the quarterly updates came as a result of the releases from re:Invent at the start of December, including new products for machine learning training kit SageMaker, as well as Amazon Braket, a service for developers to experiment with quantum computing facilities.

Alongside this, the general availability of hybrid cloud offering Outposts was announced, as well as a major partnership with Verizon. The latter was seen as a showcase for AWS Wavelength, a service which aims to offer ultra-low latency applications for 5G devices. Primary customers announced this quarter were the Bundesliga, going all-in on AWS and adding to the firm’s cadre of sporting clients, as well as Best Western Hotels, again announced at re:Invent.

The primary news from the past three months, however, was a blow from AWS’ perspective, with the awarding of the $10 billion-rated JEDI government cloud computing contract to Microsoft. AWS has confirmed it is appealing the ruling.

While slowing growth is to be expected given the speed at which AWS rose – and it was a cause for concern for analysts last quarter – Synergy Research argues that at 34% growth, AWS still holds a steady one third of the market. Microsoft, for whom Azure grew 62%, has risen by up to three percentage points year over year, according to Synergy estimates.

You can read the full AWS earnings report here.

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