Amazon.com retail continues to be the core of its parent company, and management has pressed to make it much larger with its Prime free delivery and streaming media service. The e-commerce part of the Amazon.com Inc. (NASDAQ: AMZN) can grow rapidly for years, as it rips sales from other retailers. However, CEO Jeff Bezos says a much smaller part of Amazon, its Amazon Web Services (AWS), has reached the level of the parent company’s total revenue 10 years ago, and currently its grows at a rate faster than Amazon’s more traditional businesses.
Bezos wrote in a letter to shareholders:
Just over 10 years ago, AWS started in the U.S. with its first major service, a simple storage service. Today, AWS offers more than 70 services for compute, storage, databases, analytics, mobile, Internet of Things, and enterprise applications. We also offer 33 Availability Zones across 12 geographic regions worldwide, with another five regions and 11 Availability Zones in Canada, China, India, the U.S., and the U.K. to be available in the coming year. AWS started with developers and startups, and now is used by more than a million customers from organizations of every size across nearly every industry – companies like Pinterest, Airbnb, GE, Enel, Capital One, Intuit, Johnson & Johnson, Philips, Hess, Adobe, McDonald’s, and Time Inc.
Bezos claims AWS has 1 million customers and that ongoing innovation can make that figure much larger within a short time.
The battle among the world’s largest tech companies has turned to the cloud, a measure of how important remote storage and related features have become. Amazon has to continue rapid invention in the arena to keep ahead of other aggressive programs, particularly from Alphabet Inc. (NASDAQ: GOOGL), Microsoft Corp. (NASDAQ: MSFT) and International Business Machines Corp. (NYSE: IBM). All these companies can tap existing customers as potential converts to their cloud businesses. However, by most outside measures, Amazon has a large lead in market share. Bezos means to add feature after feature to protect that lead.
The cloud, at least as a major business, has not existed for nearly as long as e-commerce. Bezos means to crush the competition as much with AWS as it did with Amazon.com.
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