Large customer wins drive Q4 growth for AWS despite global market share decline

Amazon Web Services (AWS) continues to feel the impact of customers focusing on cloud cost optimization strategies, but the rate at which new customers are joining is increasing. The company’s fourth-quarter and full-year results show a 13% increase in revenue compared to the previous year. In Q4 2023, AWS generated $24.2 billion in revenue and $7.2 billion in operating profit, up from $5.2 billion in Q4 2022. The full-year revenue reached $90.8 billion, with an operating profit of $24.6 billion, an increase from $22.8 billion in 2022. In recent quarters, AWS has faced challenges as customers prioritize optimizing their existing cloud estates rather than expanding capacity. However, the company has seen an acceleration in the number and pace of larger customer deals, with existing customers renewing larger commitments over longer periods and pursuing migrations. Notably, AWS has secured significant contract renewals with UK government departments, totaling £894 million and lasting 36 months. Amazon CEO Andy Jassy also highlighted the potential impact of Amazon’s artificial intelligence portfolio on its future financial performance, with the company expecting generative AI to drive significant revenue growth in the coming years. Despite achieving double-digit revenue growth, AWS lost some market share to Microsoft, which saw an increase during the same period.

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