AWS warns customer cloud demand is slowing as Amazon results stutter
Cost-cutting measures and high energy costs highlighted as factors in AWS slowdown
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AmazonWeb Services (AWS) has reported third-quarter revenue growth of 27.5%, its slowest year-on-year rise since the company began reporting its finances separately in 2014.
The cloud giant’s revenue for the quarter was $20.5 billion, while AWS’s operating income was $5.4 billion, a year-on-year rise from $4.9 billion in the third quarter 2021.
Despite cooling growth, AWS’s performance still outstripped the growth of the tech giant more broadly, which posted a Q3 2022 revenue of $127.1 billion, a 15% year-on-year increase.
Why the slowdown?
In a call with analysts reported byThe Register, Brian Olsavsky, Amazon’s chief finance officer attributed the slowdown to “ongoing macroeconomic uncertainties” which have “seen an uptick in AWS customers focused on controlling cost”.
Skyrocketing energy costs were also highlighted as an issue that AWS is struggling with in an analyst call, with Olsavsky saying these are “materially higher … up more than 2x over the last couple of years.”
Regardless of its recent results, AWS still controls a massive chunk of the cloud computing pie.
Amazon Web Services (AWS) controlled 33% ofthe entire cloud services marketin the first quarter 2022, according to Statistica.
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What’s next for AWS?
Despite already making massive profits, the company still has multiple avenues towards growth.
AWS has recently begunoffering EC2 instances based on its own line of self-manufactured Gravition chips, which use licensed-ARMtechnology as opposed to theNvidiaorAMDchips it has traditionally relied on.
Ubuntu is now available on AWS
Amazon has reportedly cut back on AWS credits for charities
Our guide to the best cloud hosting
AWS is a company thatcould soon have a much larger footprint in the UK, in 2022 AWS has been actively recruiting tech-focused roles in Edinburgh and Cambridge, in addition to corporate and warehouse roles in London and Manchester.
Will McCurdy has been writing about technology for over five years. He has a wide range of specialities including cybersecurity, fintech, cryptocurrencies, blockchain, cloud computing, payments, artificial intelligence, retail technology, and venture capital investment. He has previously written for AltFi, FStech, Retail Systems, and National Technology News and is an experienced podcast and webinar host, as well as an avid long-form feature writer.
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