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AWS profit and revenue rises as enterprise demand for new cloud workloads bounces back

Amazon Web Services (AWS) reported a 12% year-on-year uptick in its revenue growth during the third quarter of 2023, with the firm reporting a bounceback in the number of enterprises moving new workloads to its public cloud.

The company posted revenue of $23.1bn for the three months to 30 September 2023, and made a profit of $7bn, which constitutes a marked year-on-year increase from the same quarter in 2022 when its profit hit $5.4bn.

During the conference call with analysts, transcribed by Seeking Alpha, AWS CEO Andy Jassy said the numbers reflected the changing appetite and attitudes of enterprise IT buyers towards cloud, with more of them looking to increase their cloud usage compared with past quarters.

As previously reported by Computer Weekly, the public cloud giant had been grappling in past quarters with enterprises looking for ways to optimise and curb their cloud spend rather than taking steps to ramp up their use of off-premise services.

As a result, previous quarters have seen the firm report a slowing in its annual revenue growth rate, but Jassy said things seem to be turning a corner now.

“While we saw elevated cost optimisation relative to a year ago, it’s continued to attenuate as more companies transition to deploying net new workloads,” he said.

“Companies have moved more slowly in an uncertain economy in 2023 to complete deals. But we’re seeing the pace and volume of closed deals pick up and we’re encouraged by the strong last couple of months of new deals signed.”

Jassy added: “Deal signings are always lumpy and the revenue happens over several years, but we like the recent deal momentum we’re seeing.”

The company is also betting big on generative artificial intelligence (GenAI), said Jassy during the conference call, with the development of custom chips and the general release of Amazon Bedrock, which is a fully managed service that provides enterprises with access to foundation models through an application programming interface (API).

“As you can tell, we’re focused on doing what we’ve always done for customers, [by] taking technology that can transform customer experiences and businesses, but can be complex and expensive, and democratising it for customers of all sizes and technical abilities,” said Jassy.

“It’s also worth remembering that customers want to bring their models to their data, not the other way around. And much of that data resides in AWS as the clear market segment leader in cloud infrastructure. We’re innovating and delivering at a rapid rate and our approach is resonating with customers.”

Jassy also confirmed that all of Amazon’s “significant businesses” are working on GenAI offerings to help improve customer experience, with its retail arm using it to help forecast inventory better and make it easier for customers to find the products they are after.

Where its parent company is concerned, Jassy said Amazon.com enjoyed a “strong third quarter” with a 13% year-on-year increase in revenue to $143.1bn from $127.1bn during the third quarter of 2022. The company also reported a profit of $9.9bn this quarter, having posted a profit of $2.9bn this time last year.

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