Amazon Web Services Continues to Grow as Servers Move to the Cloud

Friday Feb 3rd 2017 by Sean Michael Kerner
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There is perhaps no better leading indicator of how much server revenue is headed to the cloud than AWS' latest earnings.

When most people talk about the public cloud, the conversation inevitably will include Amazon Web Services (AWS). Amazon reported its first quarter fiscal 2017 financial earnings on Feb. 2, once again showing growth in the cloud.

Overall revenue for Amazon during the fourth quarter was reported at $43.7 billion, a 22 percent year-over-year gain. For the full year, Amazon's revenue was $136 billion, Amazon Web Servicesup by 27 percent from 2016.

Looking specifically at AWS, Amazon reported $3.5 billion in fourth quarter revenue. For the past 12 months, AWS generated a staggering $12.2 billion in revenue from its cloud operations.

Amazon first began to break out its cloud earnings in April 2015, during the company's first quarter fiscal 2015 earnings call. At the time, AWS revenue was reported at $1.57 billion for the quarter. By July 2016, AWS had nearly doubled its quarterly revenue, with $2.9 billion in cloud sales.

"On AWS, we're very happy with the response from customers," Amazon CFO Brian Olsavsky said on his company's earnings call. "I feel we've got a very broad base of customers from startups to small and medium businesses to large enterprises, to the public sector and we're continuing to see strong growth across all those sectors."

The sectors that AWS operates in also includes new regions that opened up in 2016. During the year, Amazon opened eleven new Availability Zones across five geographic regions in the U.S., Korea, India, Canada and the U.K.

In AWS' terminology, a Region is defined as a geographic location, while an Availability Zone is infrastructure within a Region that has its own power, cooling and capacity. The general idea is that AWS customers can run applications in multiple Availability Zones to help protect and mitigate the impact of a failure in a single zone.

Among the new regions is the Ohio US-East Region that opened in October 2016, providing much needed relief to Amazon's primary US-East location in North Virginia. In December 2016, Amazon opened its first AWS region in Montreal, Quebec, Canada.

For 2017, Amazon plans on adding two new regions, including one in France and another in China.

Sean Michael Kerner is a senior editor at ServerWatch and InternetNews.com. Follow him on Twitter @TechJournalist.

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