AWS growth accelerates in quarter marred by outages

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Adam Selipsky, Amazon Web Services CEO
Source: CNBC

Amazon said Thursday that growth accelerated at its cloud division, Amazon Web Services, in the fourth quarter, outperforming analysts’ predictions.

The performance at the 15-year-old market-leading provider of remote computing, storage and database services highlights a continuing shift away from traditional data center infrastructure at corporations, schools and governments.

The AWS business generated $17.78 billion in revenue in the quarter, according to a statement. That works out to a 39.5% year-over-year increase, and it’s more than the $17.37 billion consensus among analysts polled by StreetAccount. AWS revenue grew almost 39% in the third quarter.

The unit ended the quarter with $5.29 billion in operating income, up almost 49% and well above than the $4.84 billion StreetAccount consensus.

While almost 13% of Amazon’s total revenue derived from AWS, 37% of the company’s overall operating income is attributable to cloud.

It’s possible that more than half of AWS revenue comes from EC2, one of the first offerings and the one that provides fundamental virtual machines in the form of instances that third-party developers applications use. On Thursday Amazon revealed a new indicator of adoption of EC2 instances running on semiconductors it developed in house, as opposed to instances sitting atop AMD or Intel silicon. The company said 48 of the top 50 EC2 customers by usage are drawing on AWS’ Arm-based Graviton2 chips, which first became available for preview in December 2019.

In the quarter AWS introduced a slew of new services at its Reinvent conference in Las Vegas, including a tool customers can use to manage private 5G networks. It also launched a region of data centers in Indonesia. But a series of AWS outages in December that triggered issues for Coinbase, Disney+, Slack and other online services.

This is breaking news. Please check back for updates.

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