Amazon has finally revealed solid numbers for Amazon Web Services, its cloud computing suite that has been bundled with ‘Other’ revenue for the past decade.
The numbers are impressive, with £1.06 billion in revenue, £175 million in profit. It is one of the only profitable divisions for Amazon, given the large failures of the Fire Phone, Kindle Fire and the large amount spent on R&D.
Amazon’s CEO Jeff Bezos had a lot of praise for the company’s fortune in turning a non-standard business and making it competitive and profitable, against a plethora of other cloud computing services from Microsoft, IBM, Salesforce and more.
“Amazon Web Services is a $5 billion (£3.3 billion) business and still growing fast - in fact, it’s accelerating. Born a decade ago, AWS is a good example of how we approach ideas and risk-taking at Amazon. We strive to focus relentlessly on the customer, innovate rapidly, and drive operational excellence. We manage by two seemingly contradictory traits: impatience to deliver faster and a willingness to think long term,” said Bezos during the conference call.
Even with the impressive numbers on Amazon Web Services, the company still failed to turn a profit this quarter, with a net loss of £37 million - that is down from £400 million net loss last quarter, citing inventory and advertising for the Fire Phone forcing the hefty loss.
Amazon’s e-commerce platform continues to grow in sales, with £15 billion in sales this quarter compared to £13 billion last year.
Even though Bezos is clearly not concerned with short term profits, there is a big question as to whether Amazon will ever be profitable. Several investors have lauded on the fact the e-commerce giant seems more confident spending all of its profit on R&D and new non-standard services, instead of saving like Google, Facebook or Apple.