AWS run rate hits $40bn a year, but growth continues slowing

AWS revenue rose 34 per cent in Q4

Amazon Web Services (AWS) grew more than analysts expected in Q4, with sales edging towards $10bn.

The wider Amazon business reported sales of $87.4bn for the quarter ending 31 December 2019, up 21 per cent year on year.

AWS' revenue was up 34 per cent to $9.95bn, with the cloud arm contributing two thirds of Amazon's $3.3bn net income.

Despite beating analyst guidance, AWS' sales growth slowed for the fifth quarter in a row.

Amazon CFO Brian Olsavsky said that AWS' growth should be considered in currency rather than percentages.

"We grew from a $30bn revenue run rate at the end of 2018 to a $40bn revenue run rate at the end of 2019, so we continue to be happy with our top line growth, in dollar terms as opposed to percentages.

"We had a larger dollar increase in revenue both year-over-year and quarter-over-quarter. So, we're very happy with the progress of the revenue and our adoption and acceptance by customers."

Olsavsky also dismissed an analyst's suggestions that the slowing could be a result of AWS's competitors strengthening.

"As far as [competition] is concerned, we think that we start with a very big lead in this space because of our many years of investment, not only in capacity, but also in services and features that we provide to customers. We've learned from customers.

"I said that repeatedly I think in the setting that any quarter quarter-to-quarter movement is going to be a little bumpy. But generally, what you're seeing is the convergence of a lot of investment, a lot of operational efficiency and a lot of innovation on behalf of customers."

Earlier this week Microsoft revealed that Azure had returned to quickening revenue growth, although the vendor has never revealed a sales figure.