How Profitable Is Amazon's AWS?

Newsflash! Amazon AWS is very profitable. This quarter marks the first time that Amazon has split out AWS from 'Other' income and the results are impressive: $1.57B in sales, 50% YoY revenue growth for the last 2 years. As a standalone business, analysts estimate it is worth around $50B. Margins on cloud services are good, but not great--just under 20%. For comparison, Microsoft Azure does $600M in revenue, Rackspace does $1.7B annually. Google doesn't separate its Cloud Platform income and Digital Ocean isn't public (.....yet). Last year, analyst firm Gartner estimated in a comprehensive review of the industry that AWS had five times more computing capacity than the 14 other vendors considered for the report.

Bloomberg has more on this:

Amazon Finally Discloses Cloud Services Sales, Showing 49% Jump
By Jack Clark  4:50 PM EDT April 23, 2015

Turns out there’s real money in the cloud. The Amazon.com Inc. division that serves up computer power, storage, and software via the Internet, generated $1.57 billion in first-quarter sales.

The first-ever disclosure of results from the Amazon Web Services division showed revenue increased 49 percent from a year earlier. AWS cranked out operating income of $265 million for Amazon, helping offset losses in other businesses. Net losses for the enlarged company came in at $57 million.

Amazon’s reluctance to break out results from AWS spurred years of speculation as to the true size of its cloud. The numbers suggest Amazon is ahead of rivals Google Inc. and Microsoft Corp., which are estimated to generate lower revenue in comparable businesses. A recent note by Karl Keirstead, an analyst at Deutsche Bank AG, pegged AWS sales at 10 times those of Microsoft’s cloud services.

“Amazon Web Services is a $5 billion business and still growing fast -- in fact it’s accelerating,” Amazon Chief Executive Officer Jeff Bezos said today in a statement.

Read more at Bloomberg.

In related news, Dropbox is getting ready to launch a collaborative notes service:

The last few years have seen Dropbox expand from its core cloud-synced storage offering to tackle other key components of the online life with its Mailbox email apps and Carousel photo storage app. Now, it looks like the company is getting ready to add another new product to its roster — yesterday, Dropbox quietly opened up a beta test for Dropbox Notes, a collaborative note-taking service. A sign-up page for the beta went live but offers few details beyond the goal of building "a new way for teams to write together." A quick screenshot shows an interface that closely resembles Google Docs, with clear indicators showing multiple people working on editing a text document.

There's no word yet on when this might launch or if it'll only be available to businesses who are signed up for Dropbox, but it's entirely possible this offering won't be consumer-focused. The beta signup page asks you to put in what company you work for, but Dropbox says that anyone is free to sign up for the beta, regardless of whether they work for a business that uses Dropbox.

Read more on this story at The Verge.