Amazon Web Services, back on growth track

Amazon Web Services appears to be back on the fast track, according to Amazon’s latest earnings release.

In the now-mythic “North American Sales, Other” category which includes AWS, sales were a healthy $1.34 billion, up pretty substantially from $960 million for last year’s Q3 and even last quarter’s $1.17 billion. (See chart below) AWS watchers were concerned by an unusual hiccup in that category in the second quarter. On the company’s earnings call, CFO Tom Szkutak said AWS saw close to 90 percent growth in usage.

“You can see our other revenue in North America went up a little bit sequentially and AWS is certainly the largest piece of that and is the vast majority of it,” he said.

That’s pretty good growth especially considering the heightened competition AWS is seeing in the marketplace from [company]Microsoft[/company] and [company]Google[/company]. Growth is nice, but this chart does not show profitability, and given the price wars breaking out in public cloud, one might bet that margins are being stressed here.

But [company]Amazon[/company] CEO Jeff Bezos has shown willingness to forego profitability in pursuit of growth. Overall, Amazon Inc. posted a huge loss for its third quarter. AWS just opened a new German cloud region this morning and will host its annual AWS Re:Invent conference next month.
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