Enterprise demand for GenAI fuels profit and revenue growth at AWS | JP
Amazon Web Services (AWS) is experiencing a “significant re-acceleration” in its growth, its parent company’s CEO has declared, after the public cloud giant reported 19.1% year-on-year revenue growth in its third-quarter results.
AWS achieved a quarterly revenue of $27.5bn, up from $23bn, during the third quarter of 2023, and grew its profit over the same period from $7bn in Q3 last year to $10.4bn this year.
In a conference call, transcribed by Seeking Alpha, Amazon.com CEO Andy Jassy said its Q3 performance means AWS has seen a “significant re-acceleration” in its growth rate over the past four successive quarters – as enterprises look to expand their use of the company’s cloud offerings.
As previously reported by JP, 18 months ago, the company’s profit and revenue figures had taken a tumble as economic pressures prompted many enterprises to re-evaluate their cloud plans, and slow down the pace of their off-premise migrations.
At the time, AWS said enterprises were instead focusing on optimising the cloud resources they already had, rather than seeking to grow their off-premise footprint further.
However, according to Amazon.com CEO Andy Jassy, the past few quarters have seen a shift in enterprise customer cloud spending habits because firms want to tap into generative artificial intelligence (GenAI) capabilities. “It’s much harder to be successful and competitive in generative AI if your data is not in the cloud,” he said. “Companies are focused on new efforts again, spending energy on modernising their infrastructure from on-premise to the cloud.
“This modernisation enables companies to save money, innovate more quickly and get more productivity from their scarce engineering resources, [and] it also allows them to organise their data in the right architecture and environment to do generative AI at scale,” he said.
The company’s GenAI proposition consists of three stacks, with each one designed to cater to how “hands-on” enterprises want to be with designing and operating their large language models (LLMs).
For instance, the first layer of this stack is aimed at companies that want to build their own LLMs from scratch, while the second is aimed at firms that want to make use of existing LLMs, using services such as Amazon Bedrock.
The third layer is for companies and developers that want to take a more hands-off approach to building GenAI applications, with the help of the Amazon Q, the company’s GenAI-powered software development tool.
According to Jassy, the AWS GenAI portfolio is growing rapidly and emerging as a sizeable point of competitive difference for the company.
“In the last 18 months, AWS has released nearly twice as many machine learning and GenAI features as the other leading cloud providers combined,” said Jassy.
“AWS’s AI business is a multibillion-dollar revenue run rate business that continues to grow at a triple-digit year-over-year percentage, and is growing more than three times faster at this stage of its evolution as AWS itself grew – and we felt like AWS grew pretty quickly.”