Andy Jassy, CEO of Amazon Web Services, speaks during the WSJDLive Global Technology Conference in Laguna Beach, California, on October 25, 2016
Patrick T. Fallon | Bloomberg | Getty Images
Amazon’s cloud computing business reported 28% revenue growth in the fourth quarter, falling short of 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 remains the market leader in cloud computing and storage that companies, governments and schools use to run websites and applications. Although Microsoft and Google grew faster in the fourth quarter, they are still far behind Amazon in serving companies that are downloading their data quickly.
AWS revenue rose to $ 12.7 billion from $ 9.95 billion a year earlier, below the consensus estimate of $ 12.83 billion among analysts surveyed by FactSet. AWS revenue represented 10% of Amazon’s total sales.
AWS continued to generate much of Amazon’s profit. Operating revenue increased 37% over the previous year, to $ 3.56 billion, but lagging FactSet’s consensus estimate of $ 3.75 billion. This means that 52% of the company’s operating revenue can be attributed to AWS, compared with about two-thirds in 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 in local data centers, rather than exclusively at AWS facilities. It also introduced new services, including one for adding maps to applications and another for using Apple’s MacOS operating system remotely.
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