Amazon Could Reach $100 Billion Revenue in 2014
There were 20 U.S. companies with $100 billion of sales or more in 2012. Amazon.com Inc. (NASDAQ: AMZN) will join that short and elite list next year. Based on its own forecasts, revenue will be more than $75 billion in 2013. And recent quarterly numbers show the growth rate has accelerated recently.
The crucial part of Amazon’s growth is only partially its core e-commerce business. Amazon had, according to comScore, traffic from desktop computers to its sites hitting 114.4 million unique visitors in November. That traffic has driven most of the retailer’s core legacy revenue, sales of its Kindle, and the growth of Amazon Prime and the company’s streaming video services.
However, CEO Jeff Bezos has staked much of Amazon’s growth on Amazon Web Services, the world’s largest outsourcing operation for cloud hosting for businesses and governments. Microsoft Corp. (NASDAQ: MSFT) also has a large presence in the industry, and Google Inc. (NASDAQ: GOOG) has begun ambitious efforts to pick up market share. But industry experts believe that neither is close to as large as Amazon. Its disclosures about this segment are vague. In its third-quarter statement, management commented:
Amazon Web Services (AWS) introduced more than 15 new features and enhancements to its fully managed relational and NoSQL database services. Amazon Relational Database Service (RDS) now supports Oracle Statspack performance diagnostics and has expanded MySQL support, including capabilities for zero downtime data migration. Enhancements to Amazon DynamoDB include new cross-region support, a local test tool, and location-based query capabilities.
AWS continued to bolster its management services, making it easier to provision and manage more AWS resources with AWS CloudFormation and AWS OpsWorks, which both added support for Amazon Virtual Private Cloud (VPC). AWS also enhanced the AWS Console mobile app and introduced a new Command Line Interface.
AWS continued to gain momentum in the public sector and now has more than 2,400 education institutions and 600 government agencies as customers, including recent new projects with customers such as the U.S. Federal Drug Administration.
Technology Business Research recently reported that in the fourth quarter, AWS revenue will reach $1 billion, up 145% from the same period a year ago. That means AWS could reach $6 billion to $10 billion in revenue in 2014. Other estimates forecast the number should substantially exceed $10 billion in 2015.
None of the statistics about the AWS growth should detract from the improvements of Amazon’s legacy businesses. The high end of Amazon’s revenue estimates for the current quarter is $26.5 billion. And if Amazon has picked up retail market share this season as it has in the past, that figure may be too low.
Amazon will have $100 billion in sales next year.