- Amazon Web Services has been the profit engine for its parent company.
- Amazon's cloud unit is still the market leader but faces heightened competition from Microsoft and Google.
- Andy Jassy, who runs AWS, will succeed Jeff Bezos as Amazon CEO.
Amazon's cloud-computing business reported 28% revenue growth in the fourth quarter, falling short of analysts' expectations. Amazon said Andy Jassy, who runs the cloud division, will succeed Jeff Bezos as CEO of Amazon in the third quarter of this year.
Amazon Web Services remains the market leader for cloud computing and storage that companies, governments and schools use to run websites and applications. While Microsoft and Google grew faster in the fourth quarter, they're still well behind Amazon in serving businesses that are rapidly offloading their data.
Revenue at AWS climbed to $12.7 billion from $9.95 billion a year earlier, below the $12.83 billion consensus estimate among analysts polled by FactSet. AWS revenue represented 10% of Amazon's total sales.
AWS continued to drive much of Amazon's profit. Operating income increased 37% from a year earlier to $3.56 billion, but trailing the $3.75 billion FactSet consensus estimate. That means 52% of the company's operating income can be attributed to AWS, compared with about two-thirds in the same period a year ago.
In the fourth quarter, AWS said it would allow customers to use two of its services for managing software containers in on-premises data centers, rather than exclusively in AWS facilities. It also introduced new services, including one for adding maps to applications and another for remotely using Apple's MacOS operating system.
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