Andy Jassy, CEO of Amazon Web Services, speaking at the WSJDLive Global Technology Conference in Laguna Beach, California, Oct. 25, 2016
Patrick T. Fallon | Bloomberg | Getty Images
Amazon’s cloud computing business reported revenue growth of 28% in the fourth quarter, falling short of analyst expectations. Amazon said Andy Jassy, who leads 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 for cloud computing and storage that businesses, governments and schools use to run websites and applications. Although Microsoft and Google grew faster in the fourth quarter, they are still lagging far behind Amazon in serving companies that lose their data quickly.
Sales at AWS rose from $ 9.95 billion a year earlier to $ 12.7 billion, below the consensus estimate of $ 12.83 billion among analysts polled by FactSet. AWS revenues represented 10% of Amazon’s total sales.
AWS continued to generate a large portion of Amazon’s profits. Operating income increased 37% from a year earlier to $ 3.56 billion, but lagged the FactSet consensus estimate of $ 3.75 billion. That means 52% of the company’s operating income can be attributed to AWS, compared to about two-thirds in the same period a year ago.
In the fourth quarter, AWS said it would allow customers to use two of its services to manage software containers in local data centers, rather than solely in AWS facilities. It also introduced new services, including one for adding maps to applications and another for using Apple’s macOS operating system remotely.
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