Despite rising competition from Microsoft's Azure and Google's cloud service, Amazon Web Services still reigns supreme in the cloud computing industry.
And in a note published Wednesday, Goldman Sachs reminded investors once again that AWS leads its Microsoft and Google counterparts by a wide margin in terms of revenue.
As shown in the chart below, AWS has generated $8.9 billion over the past 12 months, more than quadruple Microsoft's $1.8 billion and 15 times the sales of Google's cloud service. Even more impressive is that AWS is still seeing a whopping 72% year-over-year growth, an unprecedented growth rate for any enterprise service of its scale.
These numbers should be seen with a grain of salt, however, because they are estimates for Microsoft and Google, which don't break out revenue for their cloud computing services, and because AWS launched its service much earlier than the other two companies'. Microsoft also has a multibillion-dollar cloud software business that is not looped into these estimates.
Still, AWS' numbers are pretty staggering. And it doesn't look as if Amazon will give up its lead anytime soon. Goldman Sachs estimates that AWS would report another 58% year-over-year revenue growth when it discloses its second-quarter earnings Thursday, and it forecasts a slightly higher 60% year-over-year growth in the third quarter.
AWS recorded $2.5 billion in revenue in the first quarter. That accounted for about 10% of Amazon's revenue but roughly 40% of its profit.
"We believe the rapid pace of migration of workloads to the cloud and Amazon's accelerated investments in expanding Availability Zones in 2016 could accelerate AWS revenue growth starting in the second half of 2016," Goldman Sachs wrote.
Amazon has reported profits for four straight quarters (an anomaly for a company known for investing in growth at a loss) and had its largest quarterly profit ever in the first quarter of this year. If AWS continues to grow at this rate and keeps up its fat margins (its operating margin is about 28%), Amazon could be on its way to having another record profit quarter when it discloses its numbers Thursday afternoon.
Here's what analysts are expecting, according to Yahoo Finance:
- Q2 earnings per share (EPS): $1.11, up from $0.19 in Q2 2015.
- Q2 Revenue: $29.56 billion, up 27.5% from $23.18 billion in the year-ago period.
