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Thursday, March 14, 2024
March 14, 2024

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Bezos has ambitions for Amazon cloud

Retail giant's CEO sees no constraints for its Web services

The Columbian
Published:

A day after disclosing big profits and sales at Amazon.com’s cloud-computing business, news that sent the stock to an all-time high, the online retail giant’s chief executive trumpeted his belief that there is plenty more money to mine from the business.

In his annual letter to Amazon shareholders, Jeff Bezos noted that Amazon Web Services is targeting what amounts to the entire universe of corporate computing — everything from servers and networking technology to infrastructure software and data warehouses.

“Similar to the way I think about Amazon retail, for all practical purposes, I believe AWS is market-size unconstrained,” Bezos said to Amazon shareholders Friday.

On Thursday, Amazon disclosed financial data for AWS for the first time, showing that sales of the business grew 49 percent, to $1.6 billion, in the first quarter of 2015, and that operating profit margins hit 16.9 percent, an astonishing number for a company that ekes out slim profits or even posts losses.

The financial data confirmed what many analysts believed — that AWS is the market leader in selling infrastructure technology as a service, well ahead of rivals such as Microsoft.

That data helped propel Amazon’s shares to all-time highs, soaring more than 14 percent to $445.10.

In the shareholder letter, Bezos called AWS’ lead “significant” and wrote that it provides a “strong ongoing advantage.”

The annual letter, which offers insight into Bezos’ thinking and often serves as a news release for the company’s successes, also shed a bit more light on Amazon Prime.

Amazon has never disclosed the number of Prime subscribers who have paid the annual $99 fee for the service, which includes free two-day shipping on many products, as well as access to the company’s Netflix-like service, Prime Instant Video. A year ago, the company said Prime had “tens of millions” of members.

“Paid Prime memberships grew more than 50 percent in the U.S. last year and 53 percent worldwide,” Bezos wrote. That would imply that Prime has at least 30 million members, though many analysts peg the number at more than 40 million.

Amazon also disclosed the date for its annual shareholders meeting. It will take place June 10 at the Seattle Repertory Theatre.

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