Amazon Says Cloud Business Still Going Strong, Plans To Continue Enterprise Push


While Amazon didn't reveal any specific information or insights into the future of its cloud business in its fiscal first quarter earnings call Thursday, partners and analysts told CRN they believe the company’s broad statements signal good news for VARs.

Amazon, battling Google and Microsoft in a no-holds-barred price war, clearly remains motivated to continue pressuring competitors with price cuts. And on the call, executives gave no indication they would slow recent efforts to target enterprise customers.

Amazon doesn't break out cloud sales figures, but revenue in its "Other" category, which is home to AWS, jumped 58 percent year-over-year to $1.26 billion.

Amazon’s Senior Vice President and CFO Thomas J. Szkutak said the company “continued the pace of acceleration in terms of new things that we’re doing” after being asked why Amazon isn’t hiring more, growing faster and launching more products.

Szkutak described AWS usage as “very, very strong,” telling investors the market-leading cloud platform has seen tremendous growth as it has cut pricing on 42 separate occasions.

“We’re excited about the opportunity and we’re continuing to invest in that business, given the big opportunity that we have there,” Szkutak said of AWS.

Szkutak spoke only in broad strokes about plans to lower prices, expand the product line and bulk up professional services staff. And he mostly dodged an analyst’s question as to “nationalistic concerns” around storing data across international borders.

Jillian Mirandi, senior analyst with Technology Business Research in Boston, told CRN that the earnings comments, while vague, were in line with Amazon’s recent moves repositioning the company from a pure public cloud provider to one that offers more of a hybrid model favored by the enterprise market.

Companies are unlikely to move their entire systems onto a public cloud, and “most likely are never going to move everything to one cloud," Mirandi said, adding that Amazon is trying to get ahead of that problem by diversifying its cloud business.

“They don’t want people to think of them as a public cloud vendor anymore. They want to connect to all kinds of IT," she said.

Such a move would allow potential enterprise customers to leverage investments they’ve made over the last few years building on-premise environments with the new value proposition to connect to AWS, Mirandi told CRN.

Kevin RisonChu, Director of Systems and Infrastructure at Digitaria in San Diego, said he has seen a real transition from Amazon since he first started working with the company as an early cloud partner. AWS has placed a real focus of late in growing partnerships, especially with enterprises, he said.

NEXT: Partner Bullish On Continued Expansion


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