Andy Jassy, CEO of Amazon Web Services, speaks at the WSJDLive global technology conference in Laguna Beach, California, on October 25, 2016
Patrick T. Fallon | Bloomberg | Getty Images
Amazon’s cloud computing business recorded 28% revenue growth in the fourth quarter, below analysts ’expectations. Amazon said Andy Jassy, who heads the cloud division, will succeed Jeff Bezos as CEO of Amazon in the third quarter of this year.
Amazon Web Services continues to be the market leader in computing and cloud storage that companies, governments, and schools use to run websites and applications. While Microsoft and Google grew faster in the fourth quarter, they are still far behind Amazon in serving companies that quickly download their data.
AWS revenue was $ 12.7 billion, up from $ 9.955 billion a year earlier, below the consensus estimate of $ 12.83 million among analysts surveyed by FactSet. AWS revenue accounted for 10% of Amazon’s total sales.
AWS continued to reap much of Amazon’s profits. Operating income increased 37% year-over-year to $ 3.56 billion, but exceeded FactSet’s consensus estimate of $ 3.75 billion. This means that 52% of the company’s operating income can be attributed to AWS, compared to about two-thirds of the same period last year.
In the fourth quarter, AWS said it would allow customers to use two of its services to manage software containers at local data centers, rather than exclusively at AWS facilities. It also introduced new services, including one to add maps to applications and another to remotely use Apple’s MacOS operating system.
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