Amazon says its Cloud is a $US5 billion business

AWS generated $US1.57 billion for Amazon in the first three months of 2015

Amazon has finally shared some numbers about its Cloud business, and not surprisingly they show that it's thriving and profitable.

Amazon Web Services brought in $US1.566 billion in net sales for Amazon's first quarter, it said, up 49 per cent from $US1.05 billion AWS generated the same time a year ago. For this quarter, AWS netted a profit of $US265 million, up from $US245 million a year ago.

AWS is a $US5 billion business "and still growing fast -- in fact it's accelerating," Amazon CEO Jeff Bezos was quoted as saying in a press release. He also called the group an "example of how we approach ideas and risk-taking at Amazon."

AWS now generates nearly 7 per cent of Amazon's total revenue. Overall, Amazon's net sales for the quarter, which ended March 31, totaled $US22.7 billion, up 15 per cent from the $US19.7 billion collected in the same period a year earlier. The company posted a net loss of $US57 million in this first quarter, down from the $US108 million it lost in last year's first quarter.

The earnings release marks the first time since the launch of its Cloud service nine years ago that Amazon has broken out AWS quarterly revenue.

Previously, it has lumped sales from its rapidly growing Cloud business in the category of "North America, Other," which also included revenue from other sources such as a co-branded credit card. Analysts and media have assumed that the vast majority of revenue from this category came from cloud operations. In the fourth quarter of 2014, that category generated $US1.67 billion in sales for AWS, up from $US1.17 billion a year earlier.

For observers of the rapidly-growing Cloud computing space, the AWS numbers will provide more visibility into how not only that operation is faring, but also into general health of the market overall.

Microsoft expects to reap $US5.5 billion in revenue from all of its Cloud operations for fiscal 2015, which will end in June. In its latest quarterly report on Monday, IBM stated that its Cloud services generated $US7.7 billion in revenue in the past year, though that figure may also include outsourcing work IBM does on behalf of large enterprises and government agencies.

Amazon's busy quarter included introducing products and services on a number of different fronts.

The company announced an unlimited personal storage service at $US59.95 a year. It debuted a new marketplace for professional services, called Amazon Home Services, that connects consumers to plumbers, cleaners and the like. It also introduced the Dash Button, a somewhat gimmicky device customers can use to reorder household items such as soap.

For corporate clients, it debuted a Cloud-based email and calendar service called WorkMail.

The company has been ramping up its production of original video programming for Amazon Prime. In January, it signed a deal with director Woody Allen to produce a television series.

Joab Jackson covers enterprise software and general technology breaking news for The IDG News Service. Follow Joab on Twitter at @Joab_Jackson. Joab's e-mail address is Joab_Jackson@idg.com

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Joab Jackson

IDG News Service
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