Amazon reports financial performance of its cloud division

On Thursday, for the first time, online retailer Amazon reported the financial performance of its powerful growth engine. The numbers looked attractive, particularly when compared with companies like Microsoft and Google that are making strong efforts in the cloud computing and storage segment.

Amazon is mainly known as an online retailer and its revenue and its stock market returns have been increased by a completely different kind of commerce i.e. renting processing power to start-ups and, increasingly established businesses. Earlier, Amazon didn’t share the numbers for its cloud division. Market analysts consider it as a big positive for Amazon and most of the rating agencies have upgraded Amazon stock.

However the other tech powerhouses have since then seen that they were nowhere in a market; the market, which could soon be worth hundreds of billions of dollars. Microsoft, Amazon’s crosstown competitor, is particularly looking forward to make such an achievement, and is in infuriated chase.

At present, there is no competition as Amazon is dominant and also might be expanding its lead. However, the company’s sources are in smaller number than most of its competitors, who have tens of billions of dollars stashed away. The cloud computing mainly requires heavy investment to establish huge data centers around the world.

According to Amazon, its cloud division, Amazon Web Services, had revenue of $1.57 billion during the first three months of the year. The cloud business is generating profit with high margins. The company reported its operating income from AWS to be $265 million. This was beyond expectations of the analysts and its shares increased in after-hours trading by more than 6%.

According to Amazon executives, they look forward to AWS to sometime rival the company’s other businesses in size. The cloud business has been growing at nearly 40% a year, over twice the rate of the overall growth for the company.