Amazon’s retail business continues to grow, and chug along, and gobble up share from offline commerce and other companies desperately trying to up their e-commerce game. And that’s all fine and good — that’s what Wall Street has come to expect from Amazon. What might not have been expected, though, was just how big AWS would be and how fast it would grow to become that big.
We got a brief taste of it in April this year in the company’s earnings report, which showed Amazon Web Services was clearly on a great clip and on its way to being a business that generates more than $10 billion on a regular basis. And since then, it seems more and more obvious that the AWS bet that Amazon made years ago is going to pay off in spades as a strong core business that’s going to have great scale without the insane overhead costs of its core retail business. Each quarter we seem to see continuous success from AWS — and continuing heavy investment in that operation.
Here’s a quick snapshot of the current state of AWS from the company’s most recent earnings presentation:
The raw efficiency of AWS is going to be something that Wall Street is salivating over as Amazon continues to diversify itself beyond just its standard retail operations. Wall Street loves companies that have multiple different kinds of revenue streams that operate efficiently in parallel or are even perpendicular to the core business, but still give the company a strong way to continue to deliver value.
And Amazon knows it. Earlier this year, Amazon held an event where it unveiled a slew of new products designed to give AWS users more flexibility, streamlining the process of getting their data into Amazon’s servers. One extreme example is literally driving a truck to the front door of an office to transfer that data, but that just goes to show the lengths that the company is going to go to in order to get more and more companies signing up for AWS.
It’s hard to understate the importance of AWS, especially as competition aggressively ramps up. Microsoft and Google are increasingly trying to encroach on Amazon’s turf, where the company essentially defined what this style of cloud computing looks like and offered startups a way to quickly roll out their products for a much lower cost than buying their own infrastructure. And now, Amazon is looking at a business that is already generating more than $10 billion on a trailing twelve-month basis.
So, in short, it’s going to be a way that Wall Street is going to be looking for continuous growth from Amazon much in the same way it’s always looking for growth in its retail operations. We’re coming up on the holiday quarter, so we’re going to see what Core Amazon looks like in the face of a critical season, but nonetheless AWS represents one of the most important…
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