AWS hit $4.1 billion in revenue in Q2 as analyst notes ‘spectacular’ hyperscale numbers

James has more than a decade of experience as a tech journalist, writer and editor, and served as Editor in Chief of TechForge Media between 2017 and 2021. James was named as one of the top 20 UK technology influencers by Tyto, and has also been cited by Onalytica, Feedspot and Zsah as an influential cloud computing writer.

Amazon Web Services hit $4.1 billion (£3.13bn) in revenue for the most recent quarter, contributing almost 11% of Amazon’s overall revenue, according to the company’s latest financial results.

The figures represent a significant rise from the previous two quarters, where AWS revenue was at $3.54bn and $3.66bn. Run rate for AWS now stands at $16bn, up from $14bn for the last quarter, while overall net sales for Amazon stood at $38.0 billion.

In a conference call with analysts, Brian Olsavsky, Amazon chief financial officer, fielded several questions on the topic of AWS. “We are seeing great customer adoption,” he said, as transcribed by Seeking Alpha. “Our usage in all of our large services are actually accelerating and they’re growing at a rate higher than our revenue growth. So you’re seeing great adoption. We are seeing AWS customers migrate more than 30 databases over the last year and a half.”

Discussing profitability – or rather, how AWS’ operating margin had significantly decreased, to 22.3%, the lowest for at least six quarters – Olsavsky pointed to a 71% increase in assets acquired under capital leases, the majority of which was for Amazon’s cloud arm. “We’ve really stepped up the infrastructure to match the large usage growth and also the geographic expansion – and that is showing up in tech and content,” he said.

As AWS is the only cloud provider out of Amazon, Google and Microsoft to fully disclose its financial figures, it is therefore difficult to fully compare. Google’s ‘other revenue’ bucket, which includes cloud, was at $3.1 billion for the most recent quarter, while Microsoft’s ‘intelligent cloud’ bucket, including Azure among others such as server products, hit $7.43 billion. Google added the number of cloud deals above $500,000 had tripled year over year.

According to a note published by Synergy Research yesterday evening, Amazon managed to gain 1% in market share over the last four quarters in spite of its dominant position, with Microsoft growing 3%, Google 1% and IBM staying steady. This evidently has a knock on for the rest of the market, with the following 10 players – whose combined market share is just over half of Amazon’s – falling 1%, and the rest of the market dropping significantly. As previously, of the second-tier players, Alibaba and Oracle are growing the quickest.

“The increasing dominance of hyperscale players continues to play out, with all four leading companies having cause to celebrate,” said John Dinsdale, a chief analyst and research director at Synergy in a statement. “While Microsoft Azure and Google Cloud Platform are doubling in size, IBM continues to dominate in hosted private cloud and AWS is still over three times the size of its nearest competitor.

“Some of the numbers are actually pretty spectacular,” Dinsdale added. “The year on year market growth rate is nudging down as we expected in such a large market, but it remains at comfortably over 40% and AWS alone generated revenue growth of $1.2 billion over the last four quarters.”

You can take a look at Amazon’s full report here.

Postscript: As reported by multiple sources, the rise in Amazon stock yesterday as the results were announced briefly put Jeff Bezos to the top of the pile as the richest person in the world, ahead of Bill Gates, before shares fell a few hours later putting Gates back on top.

Read more: AWS, Azure, and the state of play right now

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