AWS earnings confirm breaking the $10 billion barrier is a very realistic possibility

AWS has continued its promising progress towards breaking the $10 billion barrier, after reporting revenues of $5.4 billion for the first six months of 2016, a boost of 60% from the same period last year.

Speaking during its Q1 earnings call in April, Amazon CFO Brian Olsavsky highlighted there was a very realistic chance the AWS business would exceed $10 billion in annual revenues, becoming the first cloud infrastructure company to do so. After another quarter of healthy growth, revenues were up 58% to roughly $2.9 billion, the team are well on track to exceed the ambitious target. Progress has been healthy over the last few quarters, but the team are looking to push the accelerator harder.

“We actually see nine availability zones in four regions coming out in the next – in the coming year,” said Olsavsky. “The impact on short-term is pretty much indistinguishable from the growth that we’re seeing in our expansion of our base customers in our existing regions, so we don’t see a large step-up from the addition of new regions relative to the large and rapid growth in the business itself.”

With new data centres popping up all over the world to meet the demand of the burgeoning cloud computing sector, AWS is keeping trend, opening up in Mumbai last month, as planning nine new availability zones within the next 12 months. The impact of these new assets are unlikely to be felt during the next quarter, though long-term there the current cloud leader could reinforce its position at the top of the leader board.

“Again, we like our position, our industry leading position in the cloud space, and we’re working on things that would incent more and more customers to accelerate their cloud conversion,” said Olsavsky. “The lower prices and services that we offer, and as I said, we’ll work on things that will make it easier and easier for customers to work with us with their hybrid data centers or transfer their volume to us.”

One area of growth which could have a more short-term impact is the new FedRAMP High compliance certification, which will allow government agencies the ability to use the AWS Cloud for highly sensitive applications and workloads like patient records, financial data, and law enforcement data. Government contracts represent lucrative wins in the technology sector, which could underpin the company’s surge towards $10 billion. The accreditation also creates a useful precedent for the business if/and the team look to expand its footprint with government organizations in the international markets.