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Amazon Web Services CEO Adam Selipsky delivers a keynote address at the AWS re:Invent conference in Las Vegas on November 29, 2022.
Noah Berger | Getty Images
Amazon Revenue for the company’s cloud division grew 20% in the fourth quarter, a slower pace than analysts expected and slower than the 27.5% growth rate in the third quarter.
Cloud growth appears to have surged over the past decade and, like the rest of the pandemic-accelerated tech industry, has slowed as companies embraced services that could facilitate remote work. am.
Industry researcher Gartner estimates that Amazon Web Services leads the cloud infrastructure market, with a nearly 39% share by 2021. Microsoft’s Azure business and Google The cloud is AWS’s biggest competitor.
Microsoft said last week that revenue from Azure and other cloud services, which the company doesn’t report in dollars, increased 31% from 35% in the same period last year. Google’s parent company, Alphabet, will report earnings after Thursday’s bell.
AWS revenue growth has generally slowed since 2015 as the segment has grown larger and competition has increased. In the fourth quarter, AWS posted his $21.4 billion in revenue. This represents 14% of Amazon’s total revenue. Analysts surveyed by StreetAccount had expected AWS revenue to be $21.87 billion.
In an interview late last year at AWS’s annual Reinvent customer conference, AWS CEO Adam Selipsky said, “We have some customers who are tightening their belts right now.”
The AWS division’s fourth quarter operating profit reached $5.2 billion, nearly doubling the company’s overall profit number. However, it decreased by almost 2%. This was the first quarter since at least 2015 that AWS failed to grow its operating profit year-over-year. AWS’ stand-alone operating margin of 24.3% isn’t this narrow since 2017.
In November, AWS showcased supply chain, cleanroom, and security data storage services at the Reinvent conference. Also this quarter, AWS announced the availability of data center regions in Spain and Switzerland.
Analysts at Oppenheimer, which equates to buying ratings on Amazon, said in a report this week, “As the digital economy has somewhat unfolded, we’ve seen clients move to discounted fixed-term contracts to optimize their workloads and use “Their research shows they’re reducing the amount.” Man. “
look: Amazon Web Services’ revenue growth will slow further in 2023, says Satori Fund’s Niles.
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