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Amazon is the newest tech big to report a downbeat set of monetary outcomes, as enterprises proceed to cut back their cloud spending
By
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Caroline Donnelly,
Senior Editor, UK
Published: 03 Feb 2023 14:45
Amazon Web Services (AWS) has moved to guarantee the market that its new customer pipeline stays “healthy and robust” after its guardian firm reported one other downbeat set of monetary outcomes.
Amazon.com reported a quarterly revenue of $149.2bn for the three months to 31 December 2022, which constitutes a year-on-year (YoY) rise of 12%, and a full-year lack of $2.7bn. By comparability, the earlier monetary yr noticed the agency make a $33.4bn revenue.
Revenue was up 20% YoY for its public cloud arm, AWS, which reported revenue of $21.4bn for the quarter.
This marks one other quarter of slowing growth for AWS, as the corporate’s efficiency continues to be dented by a slow-down in enterprise cloud spending.
During a convention name with analysts, transcribed by Seeking Alpha, Amazon chief monetary officer Brian Olsavsky mentioned the outcomes replicate the truth that “enterprises of all sizes” are reducing again on their cloud spend due to “tough macroeconomic conditions”.
“Our customers are looking for ways to save money, and we spend a lot of our time trying to help them do so. This customer focus is in our DNA and informs how we think about our customer relationships and how we will partner with them for the long term,” he mentioned.
This downturn in demand for its providers is a development, he acknowledged, that began in the course of the third quarter of 2022, and seems set to persist into the corporate’s new monetary yr.
“So far in the first month of the year, AWS’s YoY revenue growth is in the mid-teens. That said, stepping back, our new customer pipeline remains healthy and robust, and there are many customers continuing to put plans in place to migrate to the cloud and commit to AWS over the long term,” he mentioned.
During the decision, Amazon.com CEO Andy Jassy additionally mentioned the slowdown in AWS’s revenue growth can also be an indication that enterprises are utilizing cloud in the best way it was all the time supposed to be used, by way of having the ability to scale up or down in accordance to demand.
“One of the advantages…of the cloud is that when it turns out you have a lot more demand than you anticipated, you can seamlessly scale up,” he mentioned.
“But if it turns out that you need as much demand as you had, you can give it back and stop paying for it. And that elasticity is very unusual, it’s something you can’t do on-premises, which is one of the many reasons why the cloud is and AWS are very effective for customers.”
And the truth that the corporate is actively serving to clients curtail their spending throughout these instances of financial uncertainty can also be a present of its dedication in the direction of constructing a long-lasting relationship with them, he added.
“We are not focused on trying to optimise in any one quarter or any one year – we’re trying to build a set of relationships in business that outlast us all.”
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…. to be continued
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