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Amazon Q3 2021: AWS nears 40% in year-on-year growth

Amazon has reported 39% year-on-year growth for its public cloud division AWS and posted overall third quarter revenue of $110.8bn, up 15% on last year

Amazon has announced revenue of $110.8bn for its third quarter, up 15.3% on the same period last year. Its public cloud division Amazon Web Services (AWS) saw almost 40% growth with sales of $16.1bn, according to the company’s results statement.

The internet giant also announced a slew of new customers for AWS, including NXP, a European designer and manufacturer of specialised semiconductors; Wyndham Hotels & Resorts, whose brands include Travelodge; and international financial services and insurance company Sun Life.

Amazon CEO Andy Jassy underscored, in the quarterly statement, what he sees as the company’s wider social contribution during the Covid-19 pandemic. He said: “We’ve always said that when confronted with the choice between optimising for short-term profits versus what’s best for customers over the long term, we will choose the latter - and you can see that during every phase of this pandemic.

“In the first several months of Covid-19, Amazonians [Amazon employees] played an essential role to help people secure the requisite PPE, food, and other in-demand items needed, and we worked closely with businesses and governments to leverage AWS to maintain business continuity as they responded to the pandemic.

“Customers have appreciated this commitment, which is part of what’s driving this past quarter’s AWS growth acceleration to 39% year over year; but, it’s also driven extraordinary investments across our businesses to satisfy customer needs—just one example is that we’ve nearly doubled the size of our fulfillment network since the pandemic began.”

However, Jassy also pointed to trouble ahead: “In the fourth quarter, we expect to incur several billion dollars of additional costs in our consumer business as we manage through labour supply shortages, increased wage costs, global supply chain issues, and increased freight and shipping costs”.

AWS was the source of all Amazon's profit during the quarter. The cloud division saw operating income of $4.88bn - and increase of 38% year-on-year - compared to operating income across Amazon as a whole of $4.85bn, a 21% decline.

“AWS has seen a re-acceleration of revenue growth as customers have expanded their commitment to the cloud,” said Brian Olsavsky, Amazon’s chief financial officer, according to a transcript of a call with financial analysts on the Seeking Alpha website.

Olsavsky cited adoption of its machine learning offerings and Amazon’s custom-designed Graviton 2 processors as key contributors to AWS’s growth.

“Amazon Sagemaker continues to help customers scale their use of machine learning to core workloads, making it one of the fastest-growing services in AWS history, with tens of thousands of active external customers using it every month,” he said.

AWS announced in Q3 $40m in credits and technical expertise over the next three years to support organisations around the world that are developing systems to improve health outcomes and health equity for “underserved or underrepresented communities”.

The company highlighted a range of new technological capabilities for AWS, three of which are in data management and analytics. It announced the general availability of Amazon MemoryDB for Redis, an in-memory database, and of Amazon Managed Grafana, a data visualisation service that is said to "enable customers to instantly query, correlate, and visualise operational metrics, logs, and traces, as well as internet of things (IoT) data”.

The third update is a natural language and visualisation capability in Amazon QuickSight. This is said to remove the need for business intelligence analysts to update a dashboard every time a new business question arises.

Also released in the quarter were Amazon Managed Service for Prometheus, a scalable, secure, and highly available service that makes it easier for customers to monitor containerised applications.

And the firm announced the general availability of the AWS Panorama Appliance, a device for running machine learning applications on multiple video streams from on-premises cameras. The appliance is said to enable customers to use machine learning to perform visual inspections of production lines, monitor drive-through queues at quick-service restaurants, and assess the layout of their physical locations to improve product placement.

The parent company’s Amazon Future Engineer computer science education programme for students from underserved communities was also announced, in the quarter, to be available in the UK and France.

For European Amazon consumers, the company highlighted some developments in the quarter. Prime is now available in Sweden and Poland. In the UK and Ireland, Prime members can now receive a free Deliveroo Plus membership for a year, giving them unlimited free delivery on orders over £25.

Prime Video also streamed its first-ever UEFA Champions League football matches in Germany and Italy. In the UK, the US Open tennis final featuring 18-year-old rising star Emma Raducanu was the most-streamed tennis match in Prime Video history.

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