AWS Earnings Augur Rising Public Cloud Tide -- For Some
By Beth PariseauOctober 26, 2015
Summary Notes of Article:
- The results revealed by the big players in the public cloud market show they’ll keep getting richer.
- AWS shocked Wall Street with their huge profits for their Q3 2015. They reported 78% revenue growth year over year crossing the $2 billion mark last quarter. However, the really impressive number is them generating $521 million in profits compared to last year’s profits of $98 million. This achieved even when the company cut its prices several times.
- Jillian Freeman, senior analyst for cloud of Technology Business Research Inc, said such big companies’ operating margin growth usually slows down. However, Amazon is speeding up, which shows where the market is.
- According to Freeman, AWS’ growth is due to the flywheel effect of scale: the big get bigger and the small get left behind.
- She also predicts AWS’ 25% market share will keep growing. Smaller players have decided to leverage AWS as a broker, instead of trying to compete. One good example is HP. They’re closing down their public cloud and will focus on hybrid and private cloud environments. Another example is Rackspace. They manage and resell AWS services, instead of trying to provide similar offerings.
- It’s predicted that Google, Amazon and Microsoft will keep their lead, and that new competitors don’t stand a chance against them.
- Amazon will keep growing thanks to their broad offering of services, like EC2, Simple Storage Service (S3), Aurora database, etc.
- Competitors have a chance to take advantage of AWS lock-in factor, since their services seem to be more “sticky”. Another area to work on is Amazon’s complex billing system.
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Jade Witte
Cloud & Network Consultant
Connect with me on LinkedIn: https://www.linkedin.com/in/jadewitte
For a LinkedIn connection request use this email: jade@jadewitte.com
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