Amazon recently disclosed financial performance of its powerful growth engine and number are good especially compared with big companies like Google and Microsoft that are following it. Amazon is known as online retailer primarily, its stock market and revenue returns for years that have been energized by entirely different kind of commerce: renting processing power to startups and increases established businesses.
Amazon helped to popularize field known as cloud computing and largely itself for years, a tremendous advantage in industry where rivals shift one another closely. Other tech powerhouses have awakened the fact they will be in a market that could be hundreds of billions of dollars. Amazon’s cross town rival Microsoft is committed to challenge and in fierce move.
According to the report of first quarter earnings of Amazon, revenue of $1.57 billion was generated during first three months of year. Company has to focus on what is more unusual at company which is responsible for losses, substantial profits are generated by cloud business. Company has disclosed its operating income from AWS was $265 million.
Microsoft ranked on second number in cloud computing. Two businesses were compared on different parameters, precisely due to Microsoft has reported its cloud results. Microsoft has announced recently that its annual revenue from its commercial cloud business would be $6.3 billion based on performance. While Amazon told comparable annual figure for AWS was $5.16 billion.
Microsoft includes revenue from different online applications into that figure. Azure, cloud business provides revenue is more directly comparable to Amazon’s cloud services, was recently estimated by Deutsche Bank to be little as one-tenth from AWS.
AWS has provided computing power to various divisions of Amazon. Amazon offered to startups that were struggling to move themselves by their good internal performance.
Executives of Amazon have told AWS expectation to eventually rival other organization of company in size. Growth of cloud business is about 40 percent a year which is more than twice of rate of overall company. Mostly Wall Street analysts have been hope for spinoff.
Cloud computing service of Google has started pressing AWS on pricing, hurting profitability. Amazon told it to cut prices dozens of time, which developed its revenue growth.
Solution wants to provide other services including database software, analytics and remote operation of desktop computers. These are generally slow-growing businesses. Reseller network has also increased by Amazon hope to rival kind of Microsoft strategies Microsoft employed to promote Windows for business.
Many companies of big technology has dozed through cloud computing in early days, but most of them like Microsoft, got religion from now on-wards. Microsoft’s chief executive ran its Azure cloud business and has made cloud business a top priority.
Though Cloud business of Microsoft is smaller than Amazon, it is growing fast, more than double from last year. One of brightest spots at a company still slowdown in PC sales.
Analysts believed in Microsoft to get better chance of influencing large businesses using its software products by adoption of cloud services. There may be big challenge for Startups. Amazon has become synonyms with cloud computing with them, even Microsoft has filled technological gap with its offerings. Revenue has given surprising growth especially in case of company’s robust size makes large profit. Revenue rose to $22.72 billion by 15 percent which is about $300 million more than expected.
