Amazon’s cloud computing unit’s revenue increased 27.5% in the third quarter, falling short of analysts’ expectations. It is the slowest rate of growth since at least 2014. Amazon Web Services now accounts for 16% of total revenue at Amazon, down from 33% a year ago.
AWS’s operating margin shrank to 26.3% in the third quarter, down from 29% in the second. The division’s operating income was $5.4 billion, which was less than the StreetAccount consensus of $6.37 billion. According to Olsavsky, Amazon will see wage inflation in 2022, and higher energy prices will reduce operating income.
AWS launched a second cloud data centre region in the United Arab Emirates during the quarter, and it announced the availability of “serverless” services that allow developers to deploy data-analytics tools with least server-management work.
Amazon has slowed hiring in AWS, despite the fact that it is growing faster than the company’s core e-commerce business. Amazon has met its hiring needs in some areas of AWS, while others have millions of job openings, an AWS spokesperson told CNBC earlier this week. The comments came as Google and Microsoft both announced plans to reduce headcount growth.
Sales growth slowed across many of Amazon’s businesses in the third quarter, and executives expect those trends to continue in the fourth quarter, according to Olsavsky.
Sales growth moderated across many of Amazon’s businesses in the third quarter, and executives expect those trends to continue in the fourth quarter, according to Olsavsky. Organizations of all sizes are evaluating their technology spending, and Amazon has been collaborating with enterprise customers to help them reduce their costs, he said.
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