Amazon.com, Inc. (NASDAQ:AMZN)’s Amazon Web Services has posted impressive results of $5 billion.
It is the first time that Amazon’s Web Services results exceeded $5 billion in almost 10 years.
Unnoticeably, International Business Machines Corp. (NYSE:IBM)’s cloud services has posted excellent results of $7.7 billion beating the results of Amazon.
Direct comparison between the tech giants is not appropriate because each is conducting different business operations.
The results clearly indicate that cloud services are heading for a massive business in the software sector just like the PCs commanded a top slot in the 90’s.
Growth of Cloud Services
The idea for cloud services started 3 years ago when Benjamin Black was working with Chris Phinkam Manager on infrastructure. The duo laid a foundation for how the cloud services will standardize and completely automate the server infrastructure of Amazon.
Phinkam and Benjamin Black presented their idea to the Jeff Bezos Chief Executive Officer, who really liked the concept. Jeff Bezos imagined that he could generate a profitable business based on that vision.
And later when the company introduced the cloud services, it has become a grand success.
The business customer base of Amazon Web Services has exceeded the figure of 1 million. Its notable clients include Expedia, Netflix and a lot of startups.
Healthcare.gov.in has moved parts of the web site to the cloud server of Amazon after landing in troubles on its launch.
CIA has recently entered into an accord with Amazon for the design and development of custom cloud services. The deal is valued at $600 million.
Still there are limits for the low margin and low cost approach of Amazon. The innovative services of the company are likely to attract the dragon eye of competitors that will have a credible effect on its thin margins.
Exactly the same thing is happening now. High Value services are out placing its infrastructure services.
One of the early contenders, International Business Machines Corp. (NYSE:IBM) is capitalizing on this trend with its high value cloud services.
