Amazon's cloud business is becoming so successful that at some point people won't even think of it as a retail company, RBC Capital Markets analyst Mark Mahaney told CNBC on Friday.
"I think every year that we're talking about Amazon, more and more the conversation will be about cloud and less and less about retail," said Mahaney.
Mahaney recalls a statement Amazon's chief executive made years ago, which he said foreshadows what's to come. "I heard Jeff Bezos make a comment about seven years ago that one day cloud can be bigger than the retail business, and I was shocked by that statement," he said.
"Both of those segments, by the way, are nice setups for Amazon," he said. "Only about 10% of all workloads that could go into the cloud are in the cloud, so there's a lot of secular growth there."
The growing importance of the cloud means the big tech companies will continue to invest there. But Mahaney said Amazon is in the best position to win the cloud wars, with Microsoft a close second and Google in third place. "Amazon is situated against two very large and still lightly penetrated markets, so it means the growth should be premium for Amazon for the next five to ten years."