Wednesday, November 1, 2017
If not for its cloud business, Amazon would be posting big losses
Amazon's cloud business has become the company's gold-egg-laying goose.
For much of the last two years, Amazon Web Services — the company's cloud computing unit — has accounted for a sizeable chunk of Amazon's overall profits. But, as we can see in this chart from Statista, in three of Amazon's last five quarters it's done even more — it's covered over the red ink posted by Amazon's other segments and helped it turn a likely loss into a profit.
The company's most recent quarter is a case in point. The $1.2 billion operating profit posted by AWS wiped out the $936 million operating loss recorded by Amazon's international e-commerce business.
AWS, which dominates the cloud computing market, reported $4.6 billion in revenue in the third quarter, up from $3.2 billion in the same period last year, and is on track to post $18 billion in total revenues this year. Its success has helped keep the pressure off company CEO Jeff Bezos, whose longtime strategy has been to run Amazon's businesses at close to break even to gain market share. Indeed, Amazon's stock skyrocketed after its most recent quarterly report.
Mike Nudelman/Business Insider