AWS Growth Rate Hits 37% in Amazon's Q2 Update
Amazon Web Services (AWS) is expanding at an incredible pace. In its second-quarter update, AWS posted a 37% year-over-year growth rate in sales to $42.2 billion. The company's cloud business is so large that it would rank 24th on the Fortune 500 list if it were a standalone entity.
According to Amazon CEO Andy Jassy, 'AWS is now a $169 billion annualized revenue run rate business.' This rapid growth is expected to continue as more companies shift their IT spending from on-premises solutions to cloud-based ones. AWS currently accounts for the majority of Amazon's operating income and boasts higher margins than the company's e-commerce business.
Amazon has significant near-term visibility in its cloud business, with a backlog of $496 billion, up triple digits year over year. The company plans to spend around $220 billion on capital expenditures this year, but still isn't meeting demand for its services.