AWS revenues go up 49% year on year, remains ‘in a league of its own’

Revenue for Amazon Web Services (AWS) went up 49% year over year to $6.1 billion (£4.6bn) representing another stellar quarter for the cloud infrastructure giant.

The AWS revenues, up from $4.1bn this time last year and up from $5.4bn in the previous quarter, comprise 11.5% of Amazon’s total revenues of $52.9bn.

In an analyst call after the announcement was made, Amazon chief financial officer Brian Olsavsky noted how AWS’ ability to save on infrastructure resources has helped not only the company’s customers, but also on the consumer side of Amazon’s business.

“Our growth is coming from customers that span from startups to enterprise customers to government agencies, and they start small and then they continue to build and shift their businesses to us,” said Olsavsky. “A large number have gone all-in on AWS, and have had a chance to lower their cost structures as a result.”

In the most recent quarter, various new customers have been announced, from Ryanair, to Formula 1, to Major League Baseball (MLB). Only in the case of Ryanair was a customer going all-in – Formula 1 would be migrating the ‘vast majority’ of its infrastructure from on-prem, while for MLB the dialogue was of extending the partnership.

Yet in all three cases, the importance of machine learning crunching bigger and bigger data workloads was cited as a key reason for choosing Amazon’s cloud. Ryanair is aiming to utilise Amazon Lex, the technology which underpins Alexa, on a trial basis, while Formula 1 is looking to deliver real-time insights and predictions drawing from more than 65 years of race data.

Regular watchers will be interested at how often AWS is mentioned during the lengthy highlights reel on each financials release – 30 this quarter, up from 26 three months before – with the company also citing the general availability of EKS, its managed Kubernetes service, as a key highlight.

So how does this compare with the rest of the field, who all published last week? Microsoft trumpeted an 89% uptick in Azure revenues over the course of a year, while Google’s $4.4bn in ‘other’ revenues – of which Google Cloud forms a part – was a 36% increase on the previous 12 months. IBM, meanwhile, secured another quarter of growth, with cloud revenue up 20% representing almost a quarter of the company’s total earnings.

Yet there is still of course a degree of filtering in play.

Ultimately, according to the latest figures from Synergy Research, the hyperscalers continue to squeeze the rest of the market, with each major player growing. Amazon controls more than a third of the overall market, larger than its four nearest rivals – Microsoft (14% market share), IBM (8%), Google (6%) and Alibaba (4%) – combined.

The research firm puts the market into three divisions; IBM, Oracle, Rackspace and Salesforce as strong niche players, Alibaba, Google and Microsoft as gaining market share ‘but a long way to go’, and Amazon ‘in a league of its own.’

“Amazon Web Services and its three main challengers all turned in some exceptional growth numbers in the quarter. Collectively those four firms alone accounted for well over three quarters of the sequential growth in cloud service revenues,” said John Dinsdale, a chief analyst at Synergy. “In a large and strategically vital market that is growing at exceptional rates, they are throwing the gauntlet down to their smaller competitors by continuing to invest enormous amounts in their data centre infrastructure and operations.

“Their increased market share is clear evidence that their strategies are working,” Dinsdale added.

You can read the full Amazon financial statement here.

Previous quarter’s analysis: AWS and Microsoft bask in strong financials – but is AI the battleground for the next ‘cloud wars’?

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