Andy Jassy, Amazon AWS
Amazon announced Thursday that its market-leading cloud business saw revenue grow 32% in the first quarter, a faster pace than analysts expected, and accelerated from 28% in the fourth quarter.
The Amazon Web Services division is critical to Amazon’s expansion plans because of its profitability. It appeared in 2006 ahead of competitors such as Microsoft Azure and Google Cloud Platform and has now grown to become a force in information technology as the world’s leading software provider, surpassing Oracle and SAP.
The AWS entity had sales of $ 13.50 billion, more than the consensus estimate of $ 13.23 billion among analysts surveyed by FactSet. That was 12% of Amazon’s total sales.
AWS plays a vital role at Amazon as the most reliable source of income. For the first quarter, AWS contributed $ 4.16 billion to operating income, above the FactSet consensus estimate of $ 3.87 billion and nearly 47% of Amazon’s total operating income. The operating margin rose from 28% in the previous quarter to 30.8%.
“We firmly believe that we have many benefits for AWS customers, from functionality to a dynamic and robust partner ecosystem,” said Brian Olsavsky, Amazon’s chief financial officer, in a conference call with analysts. “And then we really have less downtime and better security, which I think is very important for all of our customers, especially for security these days.”
In the quarter, Amazon announced that AWS head Andy Jassy would replace Jeff Bezos as CEO of Amazon and that former AWS executive Adam Selipsky was leaving his position as head of Salesforce’s Tableau business to join AWS conduct. AWS introduced new computing instances based on the latest generation of energy-efficient arm-based Graviton chips.
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