Could Amazon Web Services be feeling the heat from new public cloud competitors? Maybe. Maybe not. Second quarter net sales of AWS — or at least the category in which it is embedded– were off about 3 percent sequentially to $1.168 billion from $1.204 billion for the first quarter. But they were up 38 percent from $844 million for the second quarter last year. In the first quarter, growth in this category year over year was 60 percent. So make of that what you will.
Overall, the online retailer posted a second quarter loss of $126 million or 27 cents a share on revenue of $19.34 billion for its first quarter ending June 30. A survey of analysts by FactSet had expected Amazon to lose 16 cents per share on $19.3 million in sales, according to Marketwatch.
Of course, profit has never been a focal point for Amazon CEO Jeff Bezos, who has shown a willingness to put up with short-term thin margins in service of dominance. Amazon is investing in a big new phone effort, drones, and grocery delivery after all.
But back to cloud: as Google and Microsoft — both with deep pockets and technical benches — bring more public cloud services online, customers have more than one place to shop.
Those vendors have shown themselves willing meet Amazon price cut for price cut. And, if you don’t think they’re going after big AWS accounts, you’ve got another think coming. But they still have ground to make up — Amazon has a good 8-year head start and still offers many more (and more high-end) services than the other big boys.
Note: This story was updated to reflect that year-over-year sales growth of the category including AWS grew 38 percent, not 32 percent.