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October 28, 2016updated 07 Nov 2016 2:29pm

More cloud price cuts expected for AWS as profits double

Amazon CFO hints at more price cuts in the future.

By James Nunns

Amazon Web Services yet again displayed high levels of growth for its Q3 2016 financial results as it doubled its operating profits.

The cloud company reported revenues of $3.23bn up 55% from $2.09bn for the same quarter a year ago. Profits from operating income stood at $861m up from $428m in Q3

Amazon CFO Brian Olvasky hinted at more price cuts for AWS.

Amazon CFO Brian Olvasky hinted at more price cuts for AWS.


What this means is that for the full nine months of the fiscal year so far, AWS has made $8.86bn in sales up from $5.47bn in 2015. Operating income for the fiscal year so far sits at $2.18bn.

For the cloud wing of Amazon things only seem to be getting better. It looks set to break past $10bn for the fiscal year and it is starting to make a healthy income.

It would also appear that further price cuts will be on the way. AWS has so far cut its prices 52 times in total and Amazon’s CFO Brain Olsavsky hinted at more during the

Amazon’s earnings call on Thursday.

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“Our price reductions are a core part of our philosophy,” the CFO said. “We are comfortable with price decreases.”

While AWS appears to be happy with further price cuts, Microsoft recently revealed that it would be upping the price of its software and cloud services in the UK.

Microsoft, which opened data centres in the UK in September, said this week that prices would go up in the UK following the fall in the pound.

From January 2017, enterprise customers in the UK will have to shell out up to 22% more as Microsoft looks to realign price with Euro levels. A 13% increase for enterprise software products and a 22% price rise for cloud is expected.

AWS is expected to open a new region in the UK in late 2016 or at the start of 2017 and the public cloud market leader looks set to maintain its dominance.

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