AWS $133Bn Commits: Quarterly Cloud Tracker

AWS added $919M in incremental revenue in Q3 in addition to $1Bn increase in customer cloud commits - to an incredible💎 $133Bn total. Andy Jassy also signaled a customer shift from cost optimization to “several-year trajectory” of growth, pushing AMZN stock up.

🔺 Q3 commits: $133Bn

AWS grew 12% this quarter and now has the annualized revenue run rate of $92 Bn. Their commits in Q3 increased to $133Bn. It’s almost like 17 months of future revenue already booked, but not showing on your financials.

Given the long-term nature of these commits (averaging 3.5 years) and the ability for AWS customers to use them to buy 3rd party SaaS via AWS marketplace, it's an enticing proposition for partners to align with AWS.

📊 Deal Momentum Returns

Amazon's CEO spotlighted a positive trend among customers in recent months:

“While we still saw elevated cost optimization relative to a year ago, it's continued to attenuate as more companies transition to deploying net new workloads.

Companies have moved more slowly in an uncertain economy in 2023 to complete deals. But we're seeing the pace and volume of closed deals pick up, and we're encouraged by the strong last couple of months of new deals signed….

Deal signings are always lumpy, and the revenue happens over several years, but we like the recent deal momentum we're seeing.”

🛠️ Resurgence of Cloud Transformation

Interestingly, Andy Jassy anticipates a “several-year trajectory” of growth as businesses resume the move from on-prem to the cloud.

“We're already seeing more and more companies that are turning their attention to newer initiatives. And I think what you will see in '24 and '25 as well - I think that's going to be a several-year trajectory...

You're going to just see a lot of companies not just looking at the new generative AI workloads, but also there was a significant number of new customer transformations where companies were going to largely move from being on-premises to being in the cloud.

That got stalled in 2023 because companies were being more conservative with their spend and wary of an uncertain economy…

What you'll see increasingly is that companies will both go back to those transformations they were planning on making and working with a lot of systems integrator partners, as well as ourselves…”

💰 "Tens of billions" AI Opportunity

Unsurprisingly, Amazon CEO sees “gigantic new generative AI opportunity, which I believe will be tens of billions of dollars of revenue for AWS over the next several years”.

With their latest investments, partnerships, and deployments, AWS puts their AI growth on par with key competitors.

“the amount of growth we're seeing and the absolute amount of generative AI business we're seeing compares very favorably with anything else I've seen externally.”

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