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October 26, 2018

AWS Growth will “Bounce Around” as Azure Nips at Heels

“This quarter is slightly down, but still 46 percent growth is very strong,” said Amazon CFO Brain Olsavsky.

By jonathan chadwick

Dominant cloud provider Amazon’s third quarter results have revealed that AWS revenue growth is being outstripped by Microsoft Azure.

AWS revenue grew 46 percent to hit $6.68 billion, falling short of analyst estimates and behind the 76 percent increase in revenue for its closest rival Azure.

AWS results: Growth Rate to “Bounce Around”

In an earnings call, Amazon CFO Brain Olsavsky said AWS growth rate going forward will “bounce around”.

“This quarter is slightly down, but still 46 percent growth is very strong,” he said of the AWS results.

“We’re very happy with the growth in the business, the momentum that we’re seeing with enterprise customers.

Read more: AWS to Open its First African Data Centres in Cape Town by 2020

“It’s been a very good year from gaining greater efficiencies in our infrastructure costs.”

Net sales for AWS for the three months ending September 30 were $6.7 billion, up from $4.6 billion a year prior, while operating income rose over the year to $2.1 billion.

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Microsoft revealed a record quarter earlier this week, with net income hitting a healthy $8.8 billion, up 34 percent year-on-year.

Amazon Q4 Forecast Falls Short

Amazon’s overall third quarter net sales increased 29 percent to $56.6 billion.

Net income was $2.9 billion compared with $256 million for Q3 2017.

Operating income increased to $3.7 billion in Q3, compared with $347 million for the corresponding quarter a year prior.

Jeff Bezos, Amazon founder and CEO, highlighted the success of its B2B platform Amazon Business, in a statement.

AWS results

Amazon CEO Jeff Bezos.

“Amazon Business has now reached a $10 billion annual sales run rate and is serving millions of private and public-sector organisations in eight countries,” said Bezos.

“And we’re not slowing down – Amazon Business is adding customers rapidly, including large educational institutions, local governments, and more than half of the Fortune 100.

However, third quarter results and fourth-quarter outlook fell short of market expectations.

The company’s Q4 net sales are expected to be between $66.5 billion and $72.5 billion, which would mark a growth of between 10 percent and 20 percent compared with Q4 2017.

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