AWS Market Share

Cloud Provider2022
Amazon AWS$80B
Microsoft Intelligent Cloud$75.25B
Google Cloud$26.28B

AWS history is quite interesting. Indeed, in the early 2000s, Amazon was trying to transition from e-commerce to a platform.

In other words, to expand product variety by keeping prices low, Amazon could not effectively keep expanding by launching its labels.

Instead, as the dot-com bubble burst, Amazon had to figure out a cheaper (in the long term) and faster strategy to scale.

That is where AWS came about.

As AWS CEO Andy Jassy explained on Tech Crunch: 

“In retrospect, it seems fairly obvious, but at the time, I don’t think we had ever really internalized that,” 

Moreover, he continued: 

“So very quietly around 2000, we became a services company with really no fanfare.” 

As Tech Crunch reports:

“What you may not know is that the roots for the idea of AWS  go back to the 2000 timeframe when Amazon was a far different company than it is today — simply an e-commerce company struggling with scale problems. Those issues forced the company to build some solid internal systems to deal with the hyper growth it was experiencing — and that laid the foundation for what would become AWS.”

Ever since, AWS has scaled to become an over $80 billion turnover company with incredible profitability.

Amazon AWS (cloud) is the most successful business segment within Amazon, and it generated over $80 billion in revenues in 2022 and almost $23 billion in operating profit. Compared to over $62 billion in revenues in 2021 and $18.5 billion in net profits.

And the thing is, most of Amazon’s e-commerce profitability, as of 2022, depends on AWS.

Amazon was not profitable once AWS was removed in 2022. In fact, Amazon, without AWS generated $10.6 billion in operating losses. While Amazon, without AWS, generated $12.2. billion operating income.

In fact, by 2021, Amazon, the e-commerce company, was still profitable without AWS. By 2022, it turned out that Amazon e-commerce without AWS reported substantial net losses.

In Q3 2022, Amazon would have posted an operating loss of almost $2.9 billion without AWS’s contribution to the overall operating income of $2.5 billion.

In other words, if you were to remove AWS from Amazon, the company’s value would be reduced in less than half!

Read Next: Amazon Business Model (2022 Update), Amazon Flywheel, Amazon Mission Statement and Vision Statement, Is Amazon Profitable Without AWS?, Amazon Revenues Breakdown 2015-2021.

Read Next: Microsoft Business Model, Who Owns Microsoft?, Microsoft Organizational Structure, Microsoft SWOT Analysis, Microsoft Mission Statement, Microsoft Acquisitions, Microsoft Subsidiaries, Bill Gates Companies.

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