Dive Brief:
- Second quarter earnings of 2017 for Amazon Web Services (AWS) were released Thursday with $4.10 billion in revenue.
- AWS has a 42% year-over-year growth rate, making it a reliable source of income for Amazon. However, AWS's second-in-line competitor, Microsoft's Azure cloud, posted a 97% year-over-year earnings growth a week ago. Alphabet, parent company of Google's cloud, saw a 21% growth in revenue, but is still third in cloud providers.
- Despite total revenue of $38 billion, Amazon's stocks fell partly due to mounting operating costs. Just this week founder and shareholder Jeff Bezos was declared the richest man on the planet, but Amazon's missed earnings drops him back behind Microsoft's Bill Gates.
Dive Insight:
As a multifaceted company, Amazon's revenue in cloud-based services is expected to be a steady source of income as many companies strive to become "cloud native."
However, while many companies show an interest in migrating to enterprise cloud storage, there is resistance in terms of security and restructuring how their data is already stored. To resolve this resistance, cloud-providers are seeking solutions in hybrid cloud offerings.
AWS and IBM are showing willingness to adapt to companies that have data existing in the cloud and onsite by partnering with companies like VMware. AWS's VMware partnership recently extended to creating software for data centers to maintain its top cloud services status.
For now, AWS remains the current top cloud provider, according to Gartner's magic quadrant. AWS's status as the top reigning Infrastructure as a Service (IaaS) continues to be trailed by Azure and Google.
