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AWS Rakes in $11.6 Billion Amid Slowing Growth

As enterprises around the world continue to rely on cloud services to support employees working from home due to the COVID-19 pandemic, Amazon Web Services (AWS) is holding steady.

Parent company Amazon.com reported its third quarter earnings on Thursday afternoon. Its AWS cloud unit grew by 7% over the second quarter and 29% year over year, earning $11.6 billion for the period ended Sept. 30, in line with analyst estimates.

By comparison, Microsoft Azure, the closest competitor to AWS in terms of market share, grew by 48 percent in the most recent fiscal quarter. Microsoft does not share Azure-specific revenue in its earnings reports, however.

Despite its position as the leading cloud platform, AWS has been experiencing decelerating growth in recent fiscal years. This quarter's year-over-year growth rate of 29% is tied with the previous quarter's for being the unit's lowest on record.

And though it has historically been its parent company's fastest-growing unit, this quarter, as it did in Q2, AWS fell behind Amazon.com's International and North America retail segments, which grew by 37% and 39%, respectively.

Nevertheless, AWS remains Amazon.com's most profitable segment. Operating income was $3.5 billion, an increase of 56% year over year.

In its press release, Amazon.com executives touted AWS' market-leading position. "For the tenth consecutive year, AWS is positioned in the Leaders' quadrant in Gartner's Magic Quadrant for Cloud Infrastructure & Platform Service...and once again placed highest in Ability to Execute and furthest in Completeness of Vision."

About the Author

Gladys Rama is the senior site producer for Redmondmag.com, RCPmag.com and MCPmag.com.

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