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New AWS Cloud Services Drive Revenue Gains

The rollout of multiple new AWS cloud services keeps the cloud computing company on a strong growth track.

Amazon announced its second-quarter fiscal 2019 financial results on July 25, with its cloud subsidiary Amazon Web Services (AWS) once again showing strong gains.

AWS cloud revenue for the quarter was reported at $8.4 billion, for a year-over-year gain of 37%. While the growth rate was strong, it was slower than the 49% reported for the second quarter of 2018. Since Amazon first began breaking out its AWS revenue in 2015, it had been consistently growing at 40% or more. Despite falling below 40% last quarter, AWS' CFO Brian Olsavsky said during Amazon's financial earnings call with analysts that AWS is still growing well.

"We've been pretty transparent with our AWS revenue and income numbers and we have been breaking it out since 2015, and we're very happy with the growth in absolute dollar terms," Olsavsky said. "We're seeing a pickup from customers and their usage, their increased pace of enterprise migration, increased adoption of our services and especially our machine learning services."

New AWS Services

A key driver for AWS is its continuing services expansion that saw no signs of slowing down in the second quarter.

In Amazon's form 8-K report filed with the U.S. Securities and Exchange Commission (SEC), the company highlighted multiple new AWS cloud service introductions in the quarter, including AWS Ground Station, which enables organizations to manage and control satellite data, using a network of managed ground station antennas.

Also of note, Amazon Managed Blockchain became available in the second quarter, providing AWS customers with a blockchain service that supports a number of open-source frameworks, including Ethereum and the Linux Foundation's Hyperledger Fabric.

Security was also an area of focus for AWS during the second quarter, with a number of new services becoming generally available. Among them is AWS Control Tower, which provides governance and compliance features to help organizations control cloud operations. The AWS Security Hub is another new service that can help with compliance, by aggregating security intelligence and data from other AWS cloud services as well as partner technologies.

The Amazon Managed Streaming for Apache Kafka (Amazon MSK) also reached general availability in the second quarter. Amazon MSK enables users to migrate their existing on-premises Kafka streaming services into the cloud.

Where AWS Is Growing

While AWS is adding multiple new services, Olsavsky specifically called out the public cloud vendor's growth from machine learning.

"We're seeing a lot of increased adoption of machine learning services, especially Amazon Sage Maker," he said. "We've had tens of thousands of customers who are now using AWS machine learning services, and we'll continue to innovate on behalf of those customers."

Database is also an area of growth for AWS. According to the form 8-K filing, since launching in 2016, the number of databases migrated to AWS using the AWS Database Migration Service has grown to more than 150,000 databases.

"Database is also a multibillion-dollar business propelled by Aurora," Olsavsky said. "So we're seeing a lot of strength."

Amazon Aurora has been positioned by AWS as an alternate to Oracle's namesake database. Aurora is a managed relational database that integrates and automated common database management tasks.

Amazon isn't just growing its technology base either, it's also growing its headcount, in an effort to further accelerate AWS.

"We're continuing to add to our AWS sales and marketing teams," Olsavsky said. "We see great opportunity there to help customers engage with our services and migrate to our products."

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