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Amazon Web Services is now a $5 billion business

Amazon Web Services is now a $5 billion business


For the first time, Amazon details the earnings from its cloud computing business

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Amazon is one of the world's biggest e-commerce companies. But as it was creating that marketplace, it also developed cloud computing technology that it eventually began to sell to other players in the technology space. Today, its Amazon Web Services are one of the dominant providers in the industry. For the first time Amazon broke out the financial details of AWS, which had revenue of $1.57 billion in this quarter alone, with a profit of $265 million. That means it is likely equal to or larger than the cloud services divisions of IBM, Microsoft, or Google.

AWS is big business

"Amazon Web Services is a $5 billion business and still growing fast — in fact it’s accelerating," said Jeff Bezos, the company's founder and CEO. "Born a decade ago, AWS is a good example of how we approach ideas and risk-taking at Amazon. We strive to focus relentlessly on the customer, innovate rapidly, and drive operational excellence. We manage by two seemingly contradictory traits: impatience to deliver faster and a willingness to think long term."

Net sales at Amazon increased 15% to $22.72 billion in the first quarter, compared with $19.74 billion in first quarter 2014. Operating income increased 74% to $255 million in the first quarter, compared with operating income of $146 million in first quarter 2014. The company's net loss was $57 million in the first quarter, or $0.12 per diluted share, compared with net income of $108 million, or $0.23 per diluted share, in first quarter 2014. But a small loss is not unusual for Amazon and not likely to spook investors. Amazon's stock was up around 5 percent in after hours trading, as the market reacted favorably to its numbers.

Investors don't mind losses from Amazon

The company said that the selection of games and apps for its Fire TV has grown five fold in the last year, though it doesn't say from what base. It also pointed out that while Amazon Web Services is principally an enterprise business, the company has been able to leverage its scale in cloud computing for consumer offerings. It noted in today's earning's letter that it launched unlimited storage plans this quarter for people using its Cloud Drive.

Amazon's quarterly profit and loss, in hundreds of millions, from Q1 2013 through Q1 2015.