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AWS Cloud Lone Bright Spot For Amazon In Q3

AWS usage has shot up 90 percent quarter-over-quarter, driven by price cuts and scores of new services.

The AWS cloud keeps getting bigger, better and cheaper, propping up Amazon's North American revenues at a time when sluggish consumer product sales are irking investors.

On Amazon's third-quarter earnings call, outgoing CFO Tom Szkutak presented financials that fell well short of analyst expectations, driving down the company's share price by as much as 13 percent in after-hours trading to a market cap of $144.6 billion. Amazon posted a loss of 95 cents per share, but the online retail giant's public cloud business was a bright spot in the otherwise dark landscape.

Szkutak said in regard to North American revenue growth: "AWS is certainly the largest piece of that, the vast majority of it, growing at a faster rate than that other line item."

[ Related: Gartner Magic Quadrant Again Documents AWS Dominance In IaaS ]

Amazon doesn't break out financial data specific to cloud, instead grouping AWS earnings in the category of "other" revenue. But that vague category outpaced the growth of two neighboring North American line-items: Media and Electronics and Other General Merchandise.

"So far this quarter with AWS, we saw a very good growth in Q3 as well from a usage standpoint," Szkutak said, commending the AWS team for, "doing a fantastic job not only serving customers but launching many, many new features and services. So we're very excited about it."

Usage was almost 90 percent higher than the year-ago period. That quarter-over-quarter growth resembled what the company saw in the second quarter, he noted.

Szkutak ran through some AWS milestones in the past fiscal quarter, including price reductions for various cloud services of between 28 percent and 51 percent since April, and the release of more than 350 services and features so far this year.

AWS unveiled during the quarter AWS Directory Service aimed at simplifying integrations between AWS and on-premises cloud environments used by enterprises. The company made free four automated features from its Trusted Advisor pack that help AWS users observe best practices as far as cost and system performance. And the industry's leading IaaS provider also launched in the German city of Frankfurt its second European region.

PUBLISHED OCT. 23, 2014

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