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For cloud watchers, the real news out of Amazon’s fourth-quarter earnings call is that the company will finally break out Amazon Web Services numbers from the rest of its gigantic retail business starting in the first quarter.
To date, the AWS numbers have been buried in the poetically named “North America Net Sales (Other)” category along with a mish mash of other items. Of course that hot little tidbit prompted immediate speculation that Amazon is now on the road to spinning out AWS entirely.
The glomming of AWS in with branded credit card and other activities made sizing the cloud business a bit of a challenge for anyone outside of Amazon corporate, so any increased clarity is most welcome.
But for now we’re still stuck in the old model, so here are the AWS results (such as they are) in a nutshell: cloud services continued to sell briskly in the fourth quarter according to the company’s earnings report. For that period, net sales in the closely-watched category grew 43 percent year over year, to $1.67 billion from $1.17 billion from the year ago period.
Gauging the true size of the [company]Amazon[/company] cloud business is an in-exact art to say the least, but we do what we can. And these numbers represent top line net sales, so profitability is (and has been) subject to debate.
It was a big quarter in terms of new products — most of which were unveiled at AWS Re:Invent in November including Lambda, an event-driven compute service: a service catalog; a container service, yaddayaddayadda.
Growth would seem to indicate that AWS is forging right along even as competitors — [company]Google[/company] and [company]Microsoft[/company] — bulk up their competitive clouds. Or maybe the thirst for public cloud is bottomless and there truly is room for everyone.
On the call, CFO Thomas Szkutak, said Amazon has invested heavily both in personnel and infrastructure to build that business and that will continue. For example, from the company’s statement, it spent $1.44 billion on property, equipment, software and website development for the quarter. That total was $4.89 billion for the full year.
In a note released Thursday night, Technology Business Research Analyst Jillian Mirandi estimated that Amazon’s mostly IaaS business generated nearly $4.8 billion in revenue in 2014, up a whopping 50 percent from 2013. Meanwhile, Google and Microsoft, by her tally, generated, $177 million and $188 million respectively, in the IaaS segment.
Amazon’s huge lead, she noted, is due to its “six-year head start in the market, and is challenged as these vendors also continue to compete on price, removing price cuts as a differentiator for AWS.”
Here’s more on the non-AWS bits of Amazon earnings.
This story updated repeatedly during the earnings call Thursday.