5 Companies That Came To Win This Week

The Week Ending July 24

Topping this week's roundup of companies that came to win is Amazon Web Services' rapid sales and operating profit growth in the second quarter. Also making the list is a Hewlett-Packard and CenturyLink alliance that will help channel partners expand into hybrid IT; Fortinet's impressive second-quarter financial results; a report that predicts Palo Alto Networks will triple its market share; and Microsoft strikes a deal to acquire cloud security startup Adallom.

Not everyone in the IT industry was making smart moves this week, of course. For a rundown of companies that were unfortunate, unsuccessful or just didn't make good decisions, check out this week's Five Companies That Had A Rough Week roundup.

Amazon Web Services Reports Rapid Growth, Astounding Profitability

If there were any lingering questions about how quickly Amazon Web Services is growing -- or how financially successful it has been -- those questions are gone.

Amazon, reporting its second fiscal quarter this week, said AWS generated $1.82 billion in revenue during the quarter, up 81 percent year over year. That was far above Wall Street's expectations of 50 percent growth. The AWS operation reported operating income of $491 million, up an astounding 407 percent from one year earlier.

Equally impressive was AWS' 21 percent operating margin. That's up from 7.7 percent in the comparable period one year before.

Earlier this year when Amazon first disclosed sales and income information for AWS, the company said the cloud IT business was generating about $5 billion in annual sales. Clearly, it's already grown beyond that.

HP, CenturyLink Alliance Provides Quicker Route To Hybrid IT

Hewlett-Packard and CenturyLink struck a new partnership this week that gives HP partners and their customers access to CenturyLink's hybrid IT services running on HP systems. HP is making the services available to solution providers through its PartnerOne channel program.

The CenturyLink offerings range from managed hosting, co-location, storage, cloud, application services and big data solutions. The services can be offered on HP systems housed within CenturyLink's global data centers.

The alliance is a smart move as telecommunications and IT converge. CenturyLink and its partners gain access to new customers while HP and its partners can expand their portfolios of cloud and hybrid IT services.

Fortinet Exec Takes Shots At Competition As Q2 Sales Jump 30 Percent

Network security technology developer Fortinet reported strong growth for the company's second quarter. And Fortinet's executives used the occasion this week to indulge in a little competitive trash talking.

CEO Ken Xie, speaking on the earnings call, said Fortinet is among a new generation of security vendors "who are growing and innovating" in contrast to "legacy ones who are stagnant." He went on to say that Fortinet is "experiencing accelerating growth and scale" because of its "superior technology" while others "rely on good marketing."

Revenue for the quarter ended June 30 was up 30 percent year over year to $239.8 million. The largest portion of that revenue came from sales of the company's FortiGate next-generation firewall software. The company also sees growth potential in secured Wi-Fi -- the motivation behind Fortinet's recently completed $44 million acquisition of Meru Networks.

Analyst Report: Palo Alto Networks To Triple Market Share By 2024

Fortinet may be bragging about its current market success, but fast-growing security technology developer Palo Alto Networks now has grounds for bragging about its expected future performance.

This week, a JPMorgan report predicted that Palo Alto Networks will more than triple its market share by 2024, from its current 7 percent to 24 percent. Palo Alto Networks competes in territory held by network security heavyweights like Check Point Software Technologies and Fortinet.

No security vendor has been able to sustain revenue growth greater than 25 percent for five years after hitting $100 million. Palo Alto Networks is on a trajectory to conclude its fifth year of growth greater than 50 percent and possibly match Salesforce.com's 140 percent CAGR in its first six years.

Microsoft Reportedly Buying Cloud Security Startup Adallom

Microsoft has struck a deal to acquire Adallom, an Israeli company that provides security services for cloud applications, for $320 million, according to reports this week in The Wall Street Journal and other sources.

Adallom's services continually monitor cloud applications to detect suspicious behavior. The company has partnerships with Microsoft, Google, Amazon Web Services, Salesforce.com, SAP and Hewlett-Packard, among others.

The acquisition is seen as a way for Microsoft to boost the security of its cloud services, including its Azure platform. Microsoft also gets 75 of the best security researchers in Israel, one source told CRN.