It was Hyperscale Earnings Day on Thursday, with Amazon, Microsoft, and Google all reporting third-quarter results saying that cloud services are booming — although only Amazon gave a specific number as evidence.
Amazon Web Services (AWS) reported third-quarter revenues of $2.1 billion, up from $1.8 billion the previous quarter and $1.2 billion in the third quarter last year.
Azure, meanwhile, doubled its revenues year-over-year, but Microsoft didn’t attach a specific figure to that. It’s been estimated that Azure’s second-quarter revenues were $400 million, putting it well behind AWS.
Analysts list Amazon, Microsoft, Google, and sometimes IBM as the dominant players in cloud so far. (Their dominance appears to have driven HP out of the public cloud business, as announced this week.) Among them, only Amazon explicitly states its cloud revenues — and why not, considering the numbers have been pretty impressive.
AWS even saw margins climb, to 25 percent from 21.4 percent the previous quarter. Amazon made no promises that the margin boost would stick, however; margins are “bumpy,” as Phil Harden, Amazon’s investor relations director noted during today’s earnings call.
Margins are a concern because there’s been a price war among cloud providers, particularly between AWS and Google Cloud Platform. AWS has dropped prices eight times since April 2014, officials noted.
It’s a good bet that price cuts won’t stop. No price cut was announced at the recent Amazon Re:Invent, but as Amazon officials explained during a press session, the company prefers the conference’s focus to be on new features. News about price cuts can wait for another day (and customers won’t mind when they happen).
The new features at Re:Invent this time around included Aurora, a database meant to compete head-on with Oracle. Amazon is now saying that Aurora is AWS’ fastest-growing service ever.