Amazon May Want to Watch Out for This Faster-Growing AWS Competitor
If you own a stake in Amazon (NASDAQ: AMZN), the odds are good that its fast-growing cloud computing arm is the key reason you do. While Amazon Web Services (AWS) may only account for 15% of the company's top-line revenue, Amazon's cloud business accounts for two-thirds of the company's operating profits. Better still, AWS' sales improved by 13% last year, driving this unit's operating income up by more than 15%. Not bad. Not bad at all.
However, if you think Amazon's cloud computing business is bulletproof, think again. (NASDAQ: MSFT) is coming on strong, closing the gap between the two companies' cloud computing market share. Amazon can't afford to let this rival continue going unchecked. Or, maybe AWS isn't in a position to prevent it.
Don't misread the message. There's still lots of cloud computing business to go around. Numbers from Synergy Research Group suggest worldwide cloud infrastructure spending grew 20% year over year last quarter, capping off a similarly strong full year. Amazon is still the market leader, too.
Source Fool.com
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