Amazon downtime: how important is cloud?

If you look at Amazon’s 10Q report for three months ending March 30th 2011, income from Amazon’s AWS cloud service accounted for only $311m out of the $9.857 billion the company made altogether. Internationally, its electronics retail arm is the fastest groing area of the business, with an increase in net earnings of almost 50%. The “others” part of the business, that includes AWS, grew 23%, but AWS is only 3% of Amazon’s business.

So, in the light of the Dublin datacentre catastrophe, how critical is Amazon’s cloud services to the company’s overall business?

Long term, Amazon clearly sees the benefit of not being tied in to the whims of consumers. Its acquisition of LoveFilm video subscription service is an example of moving to a recurring revenue stream. Equally, AWS reduces Amazon’s expose in the consumer market. But, clearly, Amazon does not make its money out of enterprise IT and AWS is still such a small part of the overall business.

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