Amazon Web Services is responsible for most of Amazon’s profits

Amazon Web Services, the tech group’s cloud business, is growing fast. It is responsible for most of Amazon’s profits, although ecommerce generates far more sales. The unit’s strong prospects briefly propelled the company’s market capitalisation into top place this week… Amazon Web Services’ journey from side gig to profit mainstay is a decent rejoinder to those who sneer at flops like the Fire Phone. An experiment in cloud services has morphed into a business set to make more than $26 billion in revenue this year. Cloud computing is a crowded market. AWS may be the industry leader by size but Google is regarded as offering the most innovative data analysis tools, while Microsoft’s hybrid service appeals to groups nervous about putting all their information in the cloud… AWS’s last quarterly revenue growth number of 46 per cent outstrips (year on year) the 29 per cent reported for the group… The expansion in services adds fuel to market interest in Amazon spinning out its cloud company, although Amazon may not want to lose its profit generator… If AWS were priced at a Microsoft-like 7 times revenue, rather than Amazon’s existing 4 times, it would be worth just under $200 billion. Either way, AWS is making inroads against its competitors.

Lex.

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