Only ‘Mid-Teen’ Growth So Far In 2023: ‘Uncharted Territory’

Amazon executives did not have good news about AWS growth rate in the first month of 2023.

“So far in the first month of the year, AWS year-over-year revenue growth is in the mid-teens,” said Amazon’s CFO Olsavsky. “As we look ahead, we expect these [customer] optimization efforts will continue to be a headwind to AWS growth in at least the next couple of quarters.”

Olsavsky said the uncertain economic times is affecting how enterprises and AWS customer spend their IT dollars.

“This is a bit uncharted territory—economically,” he said. “There’s some unique things going on with the customer base that I think many in this industry are all seeing the same thing. So I don’t have a crystal ball on that one, but we are going to continue to work for to be there for our customers.”

However, Amazon says AWS had a healthy customer pipeline and expects strong growth to eventually return.

“Our new customer pipeline remains healthy and robust, and there are many customers continuing to put plans in place to migrate to the cloud and commit to AWS over the long term,” he said.

“Whether there’s short-term belt tightening in the infrastructure expense by a lot of companies, I think the long-term trends are still there,” Olsavsky said. “The quickest way to save money is to get to the cloud, quite frankly. So there’s a lot of long-term positive in tough economic times.”