Equities of e-commerce and cloud computing giant Amazon.com Inc. (AMZN
AMZN Amazon.com Inc. 1,390.00 -2.79%) are now 23.4% year-to-date (YTD), bringing the latest 12-month earnings of the share to as much as 72.8%, because the Street welcomes its growing dominance over the high margin segments. From Amazon's most promising companies, the leading public cloud platform Amazon Web Services (AWS) is a driving force behind the overwhelming bullish outlook of analysts. (See also: Amazon is ahead in competition with alphabet.)
Amazon's cloud business, with sales up 43% to $ 17.5 billion in 2017, is now the fifth largest business software provider in the world. AWS now accounts for about 10% of the total revenue of the Seattle-based retail giant, the company reported last week. In terms of revenue, the cloud activities of Amazon are just mentioned behind listed enterprise software vendors Microsoft Corp. (MSFT), International Business Machines Corp. (IBM), Oracle Corp. (ORCL) and SAP (SAP), which all detract from the retailer in the cloud space and lag behind AWS. The cloud segment of Amazon lowers SaaS market pioneer Salesforce.com Inc. (CRM) already, which has increased sales by 25% to $ 9.9 billion in the last 12 months.
Tech Giants struggle to compete with AWS
SAP, with sales in 2017 of $ 26.5 billion, could lose its position as the fourth largest business software company at AWS before the end of 2019, if the current growth figures of the companies continue. The German technology company achieved a 6% turnover last year, predicting the same growth rate in 2018. The Street expects AWS to peak 38% this year, according to FactSet.
Competing with AWS, consisting of a range of services such as databases, data analysis, productivity apps and raw computing, has proven to be a challenge for the world's largest technology companies. Some, including Cisco Systems Inc. (CSCO), have decided to throw the towel in the ring while others like VMware Inc. (VMW) believe that cooperation with Amazon is a better option.
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