Amazon Web Services (AWS), Amazon.com Inc.’s public cloud service, accounted for just 9.8% of the retail giant’s $177.9 billion in revenue last year. And yet, it was far more profitable than its other operations; for example, AWS’ operating income was $4.3 billion last year compared to a $225 million loss for Amazon’s retail sales.
And the division is growing quickly. AWS grew 42.9% in 2017 to reach $17.46 billion, up from $12.22 billion a year earlier and it soared another 48.6% in the first quarter. Amazon is on a rapid push to expand AWS’ offerings; last year, for instance, Amazon claims to have added more than 1,400 improvements to AWS, including help for developers building machine-learning models, as well as security and translation features.
The reason is simple: Public cloud hosting is a big business. And while Amazon leads the pack, it’s facing growing competition from massive technology companies such as Microsoft Corp. and Alphabet Inc.’s Google. And with a growing number of merchants and vendors moving to the cloud, the battle for market share is heating up.
The public cloud service’s growth has come quickly. In 2006, Amazon saw a bankable business…
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