Amazon has released its fourth-quarter earnings, and its cloud business exceeded analysts’ expectations with sales growing 45% year-over-year. Amazon Web Services gained $1.35 billion in operating income against a FactSet estimate set at $1.27 billion.
AWS made up 8.5% of Amazon’s fourth-quarter revenue. For the year of 2017, the percentage of total revenue earned by AWS reached approximately 10%.
In 2017, AWS expanded its infrastructure. A new region in France, followed by a second one in China opened during the fourth quarter. Plans to open 12 more Availability Zones throughout Bahrain, Hong Kong, Sweden, and a second GovCloud region in the U.S. have also been announced. AWS currently runs 52 Availability Zones across 18 regions, globally.
AWS is the Lead Profit Generator for Amazon in Q4 2017
Amazon’s e-commerce business, which has long been the primary money maker for the company, received an operating loss of $919 million on International sales and an operating income of $1.69 billion in North America.
Meanwhile, AWS had an operating income of $1.35 billion for the fourth quarter, putting it above e-commerce as a provider of net income for the quarter.
For the year of 2017, AWS outperformed the combined North American and International e-commerce operating income $4.3 billion to a loss of $225 million.
Looking Forward
Looking towards 2018, Amazon has already announced several big initiatives in an effort to further expand its AWS reach and growth.
A third Asia Pacific (Singapore) Availability Zone is being opened in the region to match growing demand.
Amazon has also acquired cloud security startup Sqrrl, adding its products and services to the AWS brand.
A new Auto Scaling Service has been added to the platform, giving users the ability to manage to scale across multiple AWS services from a central point. By adding a new, more user-friendly interface that promotes the use of multiple AWS services, Amazon hopes to draw more enterprises to expand their use of the platform as their needs scale.
AWS is also opening new joint innovation centers, including one coming to Taipei to educate entrepreneurs, enterprises, and students about the cloud and encourage the use of AWS.
Another huge new venture for Amazon is its Alexa virtual assistant. Amazon has been promoting Alexa widely, not only as part of its Echo product line but for use in the enterprise sector, as well.
“Our 2017 projections for Alexa were very optimistic, and we far exceeded them. We don’t see positive surprises of this magnitude very often — expect us to double down,” said Jeff Bezos, Amazon founder, and CEO.
“We’ve reached an important point where other companies and developers are accelerating adoption of Alexa.”
As of the time of this writing, AWS has a 17.768 rating on the Liftr Index.
