Amazon maintained its cloud market sovereignty in the first quarter of 2021. The behemoth reported its Amazon Web Services (AWS) revenue grew 32% to $13.5 billion compared to $10.22 billion a year ago. It increased its operating income 35% year over year to $4.16 billion in Q1.
Overall, AWS generated 12% of Amazon’s total revenue in the first quarter of 2021 and about 47% of its profit.
On a conference call, Amazon CFO Brian Olsavsky told investors that the cloud business “accelerated across the broad range of customers during COVID. We’ve seen many enterprises decide that they no longer want to manage their own technology infrastructure.”
Moving their workloads to AWS “gives them better costs, better capability, and better speed of innovation,” he added. “We expect this trend to continue as we move into the post-pandemic recovery.”
AWS’ profitable Q1 comes as its CEO Andy Jassy prepares to vacate his post and move into Amazon’s chief executive role replacing Jeff Bezos who, in February, announced that he was passing the torch to his cloud boss. Adam Selipsky will return as AWS CEO, following a nearly five-year break from Amazon as the CEO of Tableau. The leadership moves will happen sometime this summer.
Cloud Spending Tops $40B in Q1
All three of the largest cloud providers reported quarterly earnings this week, and overall cloud infrastructure services spending grew 35% to $41.8 billion in the first quarter of 2021, according to Canalys data. The analyst firm says AWS held steady with 32 % market share in Q1. No. 2 Microsoft Azure grew 50% for the third consecutive quarter and took 19% of the market. And Google Cloud grew 56% in the latest quarter and claimed a 7% market share.
Overall, customer spending exceeded $40 billion a quarter for the first time in Q1, with total expenditures nearly $11 billion higher than in the first quarter of 2020, and nearly $2 billion more than in Q4 2020, Canalys says.
And while Amazon and Microsoft maintained their stronghold during the first quarter, 10 other cloud providers rapidly grew their business as well, according to John Dinsdale, chief analyst at Synergy Research Group. These include: Alibaba, Google, Tencent, Baidu, IBM, Salesforce, Oracle, NTT, SAP, and Fujitsu.
“It is not exactly newsworthy that the cloud market is now huge and continues to grow rapidly every quarter, but it is noteworthy that this is the third successive quarter in which the year-on-year growth rate has actually increased — which is very unusual for such a large market,” Dinsdale wrote in an email. “Microsoft and Google had been slowly eating into the market share lead of Amazon, but not in this quarter. Amazon held its own.”
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