Much like the wind beneath an eagle’s wings, AWS is soaring high after quarterly revenues of $9.95 billion decimated the Street’s predictions of $9.81 billion. Stocks surged up 11 percent on the back of Amazon’s powerhouse Q4 report, seeing the company cross the trillion-dollar threshold. It joins the likes of Apple, Alphabet, and Microsoft in the twelve-zero-club again after briefly bumping up to the trillion-dollar mark in September 2018.
While Amazon Web Services accounts for only 11 percent of the company's overhead, it still provides ready cash flow to the company, given it years of market dominance. Of the $3.88 billion in operating income Amazon had flowing into its coffers, 67 percent of that came from AWS's $2.6 billion contribution.
In terms of growth, the company's cloud division is up 34 percent from last year. Still, as tech correspondent Eugene Kim, points out, it's the weakest year-over-year revenue rise since Amazon started reporting the web services numbers in 2015. Rivals like Microsoft and Google are making headway with their competing products, and it's potentially cutting into their bottom line.
It was a tumultuous fourth quarter for the company. Amazon lost its bid on the Department of Defense’s $10 billion JEDI contract, but, they have filed a suit with the federal court challenging the decision to award the project to Microsoft. Despite taking a bloody nose on the deal, AWS still moved forward with the annual AWS Reinvent conference in Las Vegas.
At the conference, they announced the inclusion of a tool called Code guru, that could automatically review source code, a service included with the Cassandra open-source database software, computing infrastructure to manage demand from 5G and other innovative products quickly. They also unveiled five new artificial intelligence services designed to give developers the capacity to use machine learning without prior experience.
For those holdout organizations that require highly reliable access to AWS tools and services, Amazon has introduced Outposts. This option will allow organizations to run an entire AWS cabinet from their location. A dedicated Outpost will enable companies to run AWS services without being near a data center or share bandwidth with other AWS customers.
Beyond AWS, much of Amazon's growth was attributed to its subscription services - up 34 percent from the same time last year. Online shopping was another contributor with the same day and next day deliveries quadrupling over the holiday season.
“Prime membership continues to get better for customers year after year. And customers are responding – more people joined Prime this quarter than ever before, and we now have over 150 million paid Prime members around the world,” said CEO Jeff Bezos.