Amazon Web Services continues to swallow the computer industry, and other Amazon notes

Tom Paine

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A simple earnings report can be a difficult thing to write up. The major news services - Dow Jones, Reuters, Bloomberg - certainly get it right most of the time. But at some of the top tech websites, it may not be a top priority job and as a result is farmed out to some junior staffer who can't do elementary long division.

An example of this was Amazon's earnings report today. I was trying to get a quick fix on Amazon Web Services' year-over-year growth for its 2nd quarter. At one site I went to it was 59%, at another 61%. Another mistakenly said the growth was 2nd quarter over 1st quarter.

The correct numbers were $2,886 for Q2 2016 over $1,824 (000) for Q2 2015, for a percentage increase of 58.2 %.

Although this represents a slight decline in its growth rate from recent quarters,  it is still phenomenal for a business of that size, on a pace with companies like Microsoft and Google. Its even more remarkable when considering that AWS is selling mostly infrastructure, not end user services or software that should have more value-added, and revenue.

AWS also has 25% operating margins, impressive for a business that essentially is a modern version of what used to be referred to as a service bureau.


Other interesting Amazon facts:

• Amazon Business now serves more than 400,000 businesses and generated more than $1 billion in sales in its first year

• "AWS announced the availability of X1 instances, a new Memory Optimized instance for Amazon EC2. X1 instances have 2 TB of memory — the most memory available in any cloud instance offered today by any cloud provider. Powered by the latest Intel processors and certified by SAP, X1 instances are ideal for running in-memory databases like SAP HANA, big data processing engines like Apache Spark or Presto, and high performance computing (HPC) workloads."
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• "AWS also announced that SAP business-critical applications are gaining momentum on AWS as customers including GE Oil & Gas, Kellogg’s, Brooks Brothers, Ferrara Candy Company, GPT Group, Hoya Corporation, Lionsgate, Macmillan Publishers India, RWE Czech Republic, and Bart & Associates Inc., are running SAP on AWS."

• AWS  announced that Salesforce selected it as its  preferred public cloud infrastructure provider

• NBC has a skill on Alexa, and Campbell's Soup has a Dash button. Amazon has already established itself as a leader in home IoT and has roots on the business side as well.

• With Amazon now reselling Comcast cable (no word on how that's progressing), and Comcast Business Services linking to AWS (no big deal, actually), one has to wonder if there will be more joint initiatives between the two giants in the future.

• Amazon continues to build out its fulfillment centers in New Jersey, including one near Trenton and another planned for Burlington County

• AmazonFresh launched in Boston, joining northern and southern California, northern New Jersey, Baltimore, New York, Philadelphia, and Seattle.