It was a big day for public cloud market leader Amazon Web Services. For the first time, Amazon quantified the size of its cloud segment, showing that it generates hundreds of millions in operating income each quarter, and altogether more than $5 billion in annual revenue.
Amazon introduced its first cloud infrastructure services in 2006 — the same year Twitter came out. But chief financial officer Tom Szkutak believes it’s just the beginning for Amazon Web Services.
“From our perspective, it’s a business that’s still really in day one,” Szkutak told analysts on a call today after Amazon released earnings results for the first quarter of 2015. “[There’s a lot of potential in front of us, we believe. You can see we’re putting a lot of capex [capital expenditures] obviously there, including capital leases.”
Clearly, Amazon expects that it will need the infrastructure in place in order to handle demand for the cloud services its rents out for companies small and large.
And while Amazon’s cloud revenue is not growing the way it once was, it is still growing at a respectable rate — 49 percent in the past quarter. This means Amazon, for the foreseeable future, should continue to enjoy its status as biggest player in the cloud business. It will keep inspiring competitive moves from competitors like Microsoft, Google, and IBM.
What isn’t so clear is how long Amazon will be able to preserve its cloud profit.