How AWS Is Funding Amazon’s E-Commerce Expansion In International Markets

by Trefis Team
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Amazon Web Services (AWS), Amazon‘s (NASDAQ:AMZN) public cloud division, is the fastest growing and most profitable business division for the company, with reported sales growth of 55% year-over-year (y-o-y) to $3.2 billion and operating income growth of over 100% to $861 million in the quarter ending September 2016. In comparison, operating income for Amazon’s online marketplace business in North America grew by just 37% and the operating loss in its international marketplace business expanded 160% to $541 million in the same period.amzn-23

Therefore, AWS contributed 150% of Amazon’s operating income in the third quarter, offsetting the growing losses in international e-commerce driven by investments in India. (Also read Why Amazon Is Betting Big On India)

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Amazon’s Domination In The Cloud Market

AWS was ranked first again in Gartner’s Magic Quadrant for cloud infrastructure services in Q2 2016, followed by MicrosoftIBM (NYSE:IBM) and Google (NASDAQ:GOOGL). Amazon has been a leader in the cloud infrastructure services market since 2006, owing to its wide array of Infrastructure-as-a-Service (IaaS) and Platform-as-a-Service (IaaS) offerings, and continues to grow faster than the market, thus consistently improving its share.amzn-5

Going forward, we expect Amazon to maintain its share in this rapidly expanding market by diversifying its product portfolio and expanding geographically. In a bid to reach out to all kinds of customers – startups, SMEs and large enterprises – and enhance its agility and customization capabilities, Amazon acquired Cloud9 earlier this year. It also opened two data centers in Mumbai in June in a bid to accelerate the expansion of its cloud services in the Asia-Pacific region.

Have more questions about Amazon? Please refer to our complete analysis for Amazon 

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