How Amazon Web Services makes money: Estimated margins by service
Adam Selipsky, CEO, Tableau Software
Scott Mlyn | CNBC
Every year since at least 2014, more than half of Amazon’s operating profit has come from the online retailer’s cloud division, Amazon Web Services, which provides online services and tools that software developers can stitch together to run websites and applications.
It’s an impressive business in absolute dollar terms, not just percentages: AWS ended 2020 with $13 billion in operating income, which helped Amazon report total net income of $21 billion for the year. No wonder Amazon chose the head of AWS for 15 years, Andy Jassy, as its CEO when Jeff Bezos stepped down earler this year.
Alibaba, Google, IBM, Microsoft and Oracle are all looking to challenge AWS. And unlike the Alibaba and Google clouds, AWS is profitable.
In the second quarter, Jassy’s final quarter as cloud chief, AWS had $4 billion in operating income, up about 25% year
