Analysts expect Amazon to separate AWS cloud services business in the future
Bloomberg News quoted the content of a research report by analyst Alex Haissl of investment consultancy Redburn, alleging that Amazon may split its cloud services subsidiary AWS in the future.
Alex Haissl believes that although Amazon does not currently plan to split AWS. However, judging from the profit trend of AWS’ cloud service business development in recent years, it is possible that when the market value exceeds 3 trillion US dollars, it will be split from the Amazon system into an independently operating company.
The split into an independent company is expected to make AWS more resilient in the future, while also creating greater growth possibilities. However, Alex Haissl did not speculate on the point in time when AWS’s market value will grow to $3 trillion.
In the first quarter of this year, Amazon’s product sales revenue reached $56.455 billion, while service revenue reached $59.989 billion. Among them, AWS cloud service revenue reached $18.441 billion, an increase of 37% compared with the same period last year. On the other hand, the revenue of e-commerce services has declined. The reason is that more companies have joined the e-commerce market to compete, so the proportion of Amazon’s e-commerce profits has been diluted.
However, in the cloud service market, because AWS joined the market competition very early, therefore, compared with Microsoft Azure and Google Cloud, it has more first-mover opportunities, and can even attract new start-up teams and small and medium-sized enterprises to adopt it at a lower cost. In addition, it is more attractive to many game companies.
At present, Amazon has not disclosed whether it is considering splitting AWS independently. At the same time, judging from the current profitability of the AWS business, which accounts for less than 20% of Amazon’s overall revenue, Amazon should not consider splitting the AWS business in a short period of time.
Via: Bloomberg
