AWS hits $7.4bn in Q4 revenues, comprised three quarters of 2018 overall Amazon profit

Amazon Web Services (AWS) remains the benchmark for Amazon’s profit lines and continues to improve.

The company announced revenues for AWS of $7.43 billion (£5.68bn), an increase of 45% from this time last year, with AWS revenues comprising more than 10% of Amazon’s overall sales for the quarter, up from 8.4% the year before. AWS made $2.18bn after expenses for Q4, giving it a full year profit of almost $7.3bn, or almost three quarters (72.4%) of Amazon’s overall profit for 2018.

AWS was mentioned a mere 58 times in the quarterly highlights with 11 of the 44 bullet points devoted to it. Amazon chief financial officer Brian Olsavsky told analysts that AWS “maintained a very strong growth rate and continued to deliver for customers.”

Naturally, November’s re:Invent comprised the majority of the news for the most recent quarter. The most potentially game-changing was AWS Outposts, an offering bringing AWS on-premises launched as part of an extended partnership with VMware. Machine learning and blockchain were also on the agenda, with AWS noting the sheer breadth of its portfolio as a market differentiator.

Other news included the acquisition of cloud disaster recovery and backup provider CloudEndure at the start of January, the launch of a new security offering which aimed to further mitigate S3 misconfigurations, as well as moves away from Oracle, as tweeted by Andy Jassy himself.

It’s worth noting here that while AWS continues to grow solidly with a 45% clip, Microsoft remains the quicker growing of the major cloud providers. While Redmond does not give out specific Azure figures, the company said in its filing earlier this week its revenues went up 76% compared with the previous year, at the same clip as the last quarter.

Don’t expect this to be a particularly poor performance from AWS, however. As Synergy Research, a long-time observer of the cloud infrastructure space, noted in October, given the size and continued growth of the market the ‘law of large numbers’ meant 100% growth rates cannot be maintained.

In terms of Amazon however, the mood was slightly different. Amazon’s ‘days of blockbuster growth appear to be ending’, in the words of Jeremy Bowman, writing for The Motley Fool. “Its eCommerce growth was actually worse than the 20% overall clip because that was juiced by 45% growth in AWS,” wrote Bowman.

“Amazon’s online sales are essentially growing at the pace of the industry,” Bowman added. “That may be the clearest sign yet that increasing competition from retailers such as Walmart and Target are having an impact on Amazon’s growth.”

As regular readers of this publication will know, certain retailers – Walmart included – have been ensuring their cloud infrastructure is not beholden to a competitor. Albertsons, which announced a move to Microsoft earlier this month, said it moved because of its ‘experience with big companies, history with large retailers and strong technical capabilities, and because it [wasn’t] a competitor.’ Yet speaking to CloudTech 451 Research analyst Jean Atelsek warned about this impression, saying it ‘hadn’t seen definitive evidence’ of this shift.

New AWS customers over the past quarter, meanwhile, included Ellie Mae, Korean Air, and Santander’s Openbank. There was one new customer announced alongside the financials in a sporting theme. With the Six Nations rugby union starting on Friday night, the championship is reported to be using AWS for analytics, machine learning, and deep learning services.

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