The Growth Prospects for AWS
Amazon's most profitable line of business has been imitated by other tech giants. While breakneck growth has ceased, demand from organizations for more computing with less complexity has not.
Amazon Web Services (AWS) is a subsidiary of Amazon that remotely rents out server capacity for computing, storage, and database services, commonly known as “cloud computing” and usually contrasted with “on-premises” information technology infrastructure requiring an organization to procure and maintain its own hardware. AWS is the largest cloud provider in the world, expected to generate over $100 billion in annual revenue in 2024, and holding an estimated global market share of over 31%, followed by Microsoft’s Azure at 25% and Google Cloud at 11%.1 It also has the highest margins of all of Amazon’s major lines of business: in the first three quarters of 2023, for example, AWS was responsible for 74% of Amazon’s operating profit despite making up just 16% of total revenue.2 Andy Jassy, who ran AWS from its inception as a cloud provider in 2006 through to 2021, succeeded founder Jeff Bezos as Amazon’s second CEO, a post that he still holds today.