Amazon’s Cloud Computing Numbers Surprise Technology Experts and Market Analysts

Online retailer Amazon shared the revenue and profit numbers for its cloud service for the first time and the numbers have caught market analysts by surprise. The Amazon Web Services division has registered revenue of more than $6 billion and profit over $1 billion. The cloud computing market is big but till data Amazon had not shared the details of its cloud venture.

Just when some analysts had started questioning Amazon’s ability to grow quarter on quarter, Jeff Bezos has thrown in a positive surprise for everyone. Investors are happy and many rating agencies will surely rerate Amazon stock in the coming days. Amazon stock registered impressive gains at 14.1 percent to close at $445.10 and touched $452 intraday.

Amazon Web Services registered $1.57 billion revenue and $265 million in net profit during the first quarter. Amazon launched its cloud computing venture AWS in 2006. The cloud technology offers flexibility to companies for hosting their applications and data. Cloud computing reduces the cost overheads and charges consumers based on their usage. The usage is counted in terms of computing power, data transfer and storage space usage.

AWS powers hosting for many big websites and web based applications. Till the time Amazon declared the revenue and profit numbers for AWS, the market experts were not sure about the impact it would have on the company balance sheet. Now, we can even expect rerating of some other ventures in the cloud computing space. The positive point about the cloud segment is not only the revenue but the growth it has seen.

Amazon has many competitors in the segment with Google and Microsoft pushing ahead with their cloud computing plans. Microsoft CEO has been pushing the company to offer more in the cloud segment and could report over $6 billion in cloud segment revenue. IBM also announced $7.7 billion in cloud segment revenue recently. The company reported $3.8 billion revenue for “cloud-as-a-service” segment.

Jeff Bezos