Cloud services are Amazon’s revenue growth engine. High investment brings high returns
In recent years, Amazon Cloud Services have been a big driver of Amazon's growth.
In the last two quarters, the service's revenue has increased by nearly 80% year-on-year. The revenue for the entire 2015 was as high as 7.8 billion U.S. dollars, an increase of more than three times from 1.8 billion U.S. dollars in 2012. .
Now, in the eyes of Wall Street analysts, the growth momentum of Amazon's cloud services will not slow down in the near future.
U.S. investment bank Pacific Crest predicted in a research report released on Tuesday that revenue from cloud services will triple over the next three years, and is expected to reach 2018. It will reach more than 25 billion US dollars by the year.
This strong expectation of Pacific Crest is mainly based on Amazon's recently announced large-scale expansion plan related to cloud services.
According to Amazon’s plan, the cloud service service plans to expand to 5 new markets this year, so that the total number of regions where the service exists in the world will reach 16.
This is also the first time since 2011 that the number of regions where cloud services have been expanded within one year has exceeded 4.
Of course, Pacific Crest also pointed out in the report that these expansion costs of cloud services are not cheap, and may also put pressure on Amazon's recent operating profit margins.
However, the investment bank also claimed that Amazon is not expanding. These investments in cloud services will also yield huge returns, that is, cloud services will grow rapidly in the next two years.
Pacific Crest claimed in the report , “There is naturally a time lag between breakthrough in a new data center and revenue certification.
We believe that investment in 2016 will become a potential driving force for re-accelerating growth in 2017 and 2018.
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Pacific Crest also claimed that demand for cloud services from large enterprises remains "very strong."
In the third quarter of 2015, the market's The demand for cloud services has caused Amazon's revenue from this service to account for nearly half of the total revenue of the top 10 cloud service providers.
In fact, companies such as General Electric, John Deere and Capital One now. All have become major customers of cloud services.
