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Andy Jassy, CEO of Amazon Web Services, speaks at the WSJDLive Global Technology Conference in Laguna Beach, Calif., October 25, 2016
Patrick T. Fallon | Bloomberg | Getty Images
Amazon’s cloud computing business grew 28% in revenue in the fourth quarter, below analyst expectations. Amazon said Andy Jassy, who heads the cloud division, will succeed Jeff Bezos as Amazon CEO in the third quarter of this year.
Amazon Web Services remains the market leader in cloud computing and storage that businesses, governments, and schools use to run websites and applications. While Microsoft and Google grew faster in the fourth quarter, they still lag far behind Amazon in serving businesses that offload their data quickly.
AWS revenue climbed to $ 12.7 billion from $ 9.95 billion a year earlier, below the consensus estimate of $ 12.83 billion among analysts polled by FactSet. AWS revenue represented 10% of total Amazon sales.
AWS continued to generate a large portion of Amazon’s profits. Operating profit was up 37% from a year earlier to $ 3.56 billion, but behind the FactSet consensus estimate of $ 3.75 billion. This means that 52% of the company’s operating profit can be attributed to AWS, down from around two-thirds in the same period a year ago.
In the fourth quarter, AWS said it would allow its customers to use two of its services to manage software containers in on-premises data centers, rather than exclusively in AWS facilities. It also introduced new services, including one for adding maps to apps and another for using Apple’s macOS operating system remotely.
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