Andy Jassy, CEO of Amazon Web Services, speaks at the WSJDLive Global Technology conference in Laguna Beach, California, on October 25, 2016
Patrick T. Fallon | Bloomberg | Getty Images
Amazon’s cloud computing company reported a 28% increase in revenue in the fourth quarter, beyond analysts’ expectations. Amazon has said that Andy Jassy, who heads 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 in 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 are still far behind Amazon in serving companies that download their data quickly.
Revenue at AWS rose to $ 12.7 billion from $ 9.95 billion a year earlier, below the consensus estimate of $ 12.83 billion among analysts surveyed by FactSet. AWS revenue accounted for 10% of Amazon’s total sales.
AWS continued to make a large profit from Amazon. Operating income increased 37% from a year earlier to $ 3.56 billion, but following the FactSet’s consensus estimate of $ 3.75 billion. This means that 52% of the company’s operating revenue can be attributed to AWS, compared to about two-thirds of the same period a year ago.
In the fourth quarter, AWS said it will allow customers to use two of its services to manage software containers in local data centers, rather than exclusively in AWS facilities. It has also introduced new services, including one for adding maps to applications and another for remote use of the Apple MacOS operating system.
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