Categories Technology, U.S. Markets News

Amazon Web Services is becoming a force to reckon with

Amazon.com Inc.’s (AMZN) Amazon Web Services (AWS) division is growing at a rapid pace and is on its way to becoming a force to reckon with. At the AWS re:Invent conference this week, the company announced a number of new offerings that not only strengthens its position in the cloud computing space but also pits it against major hardware providers.

At the event, Amazon unveiled AWS Outposts, a hardware product that will bring AWS services to clients on-premises. AWS Outposts come with computing offerings and storage software and are apt for customers who have concerns on public cloud usage or those who simply prefer to use their own facilities.

Amazon will do the delivery and installation for Outposts along with repair, maintenance as well as software updates. This service puts Amazon in direct competition with hardware providers like Cisco (CSCO) and Hewlett Packard Enterprise (HPE). It took Amazon a while to adopt this hybrid model, unlike its rival Microsoft (MSFT) who entered the space years ago.

Amazon also introduced two blockchain services and a variety of AI-based products at the conference. Along with its Outposts service, Amazon’s AWS unit will continue to increase its offerings in the cloud computing space.

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Amazon Web Services is already a market leader in cloud computing with several large customers. The new offerings are likely to boost its growth significantly and help win more customers going forward. During the third quarter of 2018, AWS generated $6.7 billion in sales, reflecting a 46% increase year-over-year.

Analyst Brent Thill of Jefferies projects AWS will deliver sales of $26 billion this year. He estimates this number will reach $71 billion by 2022, giving the unit a valuation of around $350 billion. Amazon has a market cap of $820 billion.

 

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