After submitting the tech analyst community to years of speculation about the precise revenues of Amazon Web Services, Amazon took the lid off its financials on Thursday to reveal that its cloud computing business does over $5B in annual revenue. In the first quarter of 2015, Amazon Web Services generated $1.57B in revenue while sustaining operating expenses of $1.31B, leaving $265M in operating income. The $1.57B in revenue earned by Amazon Web Services in the Q1 of 2015 exceeds the $1.05B the company earned in the first quarter of 2014 and illustrates year over year revenue growth of 49%. Meanwhile, AWS’s $265M in operating income from Q1 of 2015 surpasses the $245M in operating income specific to Q1 of 2014 by 8.1%. In 2014, Amazon Web Services garnered a net operating income of $660M based on the aggregate of $245M, $77M, $98M and $240M in Q1, Q2, Q3 and Q4 of 2014, respectively.
Amazon CEO Jeff Bezos commented on the financials of Amazon Web Services by noting:
Amazon Web Services is a $5 billion business and still growing fast — in fact it’s accelerating. Born a decade ago, AWS is a good example of how we approach ideas and risk-taking at Amazon. We strive to focus relentlessly on the customer, innovate rapidly, and drive operational excellence. We manage by two seemingly contradictory traits: impatience to deliver faster and a willingness to think long term. We are so grateful to our AWS customers and remain dedicated to inventing on their behalf.
Here, Bezos proudly comments on the growth of Amazon Web Services and its track record of innovation and commitment to operational efficiencies and excellence. Created in 2006, the company has revolutionized cloud computing within less than a decade and launched, within the first quarter of 2015 alone, products such as AWS Lambda, support for Docker via the Amazon EC2 Container Service and Amazon Machine Learning. As a subsidiary of Amazon, AWS’s revenue of $1.57B represents a significant percentage of Amazon’s total $22.7B in revenue but AWS will need to be concerned that its 49% year over year revenue growth for Q1 of 2015 marks a sharp decline from year over year growth for Q1 of 2014, which was 69%. The decline in year over year revenue growth points to the emergence of other market players such as Microsoft Azure, Google Cloud Platform and Rackspace as detailed in a recent 451 Research Group report, all of which will continue to challenge AWS for market supremacy in the IaaS space in the months to come, even though AWS remains the clear front-runner, hands down.
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