According to reports, Amazon recently released its third-quarter earnings report, the data show that its cloud computing business (AWS) growth slowed to only 27.5% year-on-year, with revenue and profit figures falling short of Wall Street analysts’ expectations.
It is reported that this is the lowest growth rate of Amazon’s cloud computing business since 2014 (the first time that year to announce the operating indicators of the cloud computing business separately).
The financial report data shows that in the third quarter, Amazon’s cloud computing division revenue was 20.5 billion US dollars, but Wall Street analysts surveyed by professional agency StreetAccount had an average expectation of 21.1 billion US dollars in cloud computing revenue. In comparison, Amazon’s cloud computing business revenue grew 33% in the second quarter.
The cloud computing segment accounted for 16% of Amazon’s total revenue in the third quarter. On the earnings analyst conference call, Amazon CFO Brian Olsavsky said that at the end of the third quarter, Amazon’s cloud computing division’s revenue growth rate was about 25%.
In 2006, Amazon officially entered the emerging cloud computing market. In 2021, Amazon will capture 39 percent of the global cloud computing market, down from 41 percent in 2020, according to tech market research firm Gartner.
Gartner said that in 2021, competitors such as Microsoft and Google have increased their cloud computing market share. Over the past decade or so, the cloud computing industry has seen relatively stable growth as companies or government departments around the world gradually transfer computing tasks or storage work to the “cloud” (Internet platform).
At the analyst meeting, Olsavsky said that the current macroeconomic uncertainty has led more and more Amazon cloud computing customers to control their expenses, and Amazon is actively helping customers optimize costs. In fact, Amazon has done the same during historical times of economic uncertainty.
The executive said that the breadth and depth of Amazon’s cloud computing services allows enterprise customers to flexibly adjust, such as shifting network data storage to a cheaper tier, or shifting computing tasks to Amazon’s own “graviton processing”. device”.
In the third quarter, Amazon’s cloud computing operating profit was $5.4 billion, missing analysts’ average estimate of $6.37 billion. In addition, Amazon’s company-wide operating profit was $2.53 billion.
It is reported that the operating profit margin of cloud computing business fell from 29% in Q2 to 26.3% in Q3. In 2022, Olsavsky explained, Amazon faces wage hikes, especially in the cloud computing sector, and higher (electricity) energy prices also impact operating margins.
For the cloud computing business, rising costs are also a new problem, Olsavsky said. “We’re struggling with difficulties.”
In the third quarter, Amazon’s cloud computing unit opened the country’s second data center in the Middle Eastern country of the United Arab Emirates. The department also announced the launch of a “serverless service” that can help external development agencies quickly deploy data analysis tools through cloud computing, minimizing the burden of server management.
Inside Amazon, the cloud computing division’s revenue growth rate is still higher than the core e-commerce division, but the cloud computing business has also slowed down the speed of social recruitment.
A spokesman for the cloud computing division recently said that some parts of the cloud computing business are fully filled, but in others there are thousands of jobs left. It is worth mentioning that both Google and Microsoft have recently announced that they will slow down the pace of employee growth.
Olsavsky said that when it comes to Amazon’s company-wide growth rate, several businesses saw small declines in the third quarter, and management expects that trend to continue into the current fourth quarter.
The executive said that many U.S. companies and institutions, regardless of size, are rethinking their spending on tech, and Amazon is working with corporate customers to help them lower their spending.
