AWS: Record Breaking Commits Quarterly Cloud Tracker

In a single quarter, AWS remarkably added 💲22.7 Bn in incremental cloud commitments (backlog +17%), while boosting its revenue to an impressive $24.2Bn. This growth underscores the cloud's unstoppable momentum.

📈 Navigating Towards $100 Billion ARR

Andy Jassy, Amazon CEO, commenting on a rise in Amazon Web Services (AWS) growth to 13%, up from 12% in the previous quarter, highlighted that “while cost optimization continued to attenuate, larger new deals also accelerated”.

With AWS surpassing $90Bn in trailing 12-month revenue, Jassy pointed out, “We're now approaching an annualized revenue run rate of $100 billion… In Q4, AWS added more than $1.1 billion of incremental quarter-over-quarter revenue, which on an FX-neutral basis is more than any other cloud provider as far as we can tell.”

💰 Commitment Surge Signals Growing Confidence

This quarter's commits: $155.7Bn

Last quarter's commits: $133 Bn

Growth: +$22.7 billion (+17%)

The leap of $22.7 Bn in commits this quarter is nothing short of phenomenal. It’s akin to adding a full quarter's worth of pre-booked revenue alongside accelerating sales.

This 17% growth in commits, which have an average 4 yrs contract life, underlines deepening customer long-term reliance on cloud.

AWS shared that “we have performance obligations, primarily related to AWS…those commitments not yet recognized were $155.7 billion as of December 31, 2023.”

Just recently AWS signed agreements with Salesforce (to be available on its marketplace), BMW, NVIDIA, LG, Hyundai, Merck, etc. Jassy emphasized the strength of AWS's pipeline: “Existing customers are renewing at larger commitments over longer periods and migrations are growing”.

💼 A Key Contributor to Amazon's Financial Strength

AWS's robust performance is a driver of Amazon's financial wellbeing, contributing 67% of Amazon's operating income while accounting for only 16% of its revenue. This quarter AWS's revenue climbed to $24.2 Bn, with operating income jumping 38% Y/Y.

It’s one of the reasons why Amazon shares jumped 7% on the opening today.

✨ Generative AI: A Strategic Focus

Amazon CEO emphasized that “2023 also was a very significant year of delivery and customer trial for generative AI or Gen AI in AWS. ”

One of the strengths of through Amazon Bedrock today is making it easier for customers to experiment with and iterate on Gen AI applications with a variety of models that suit different needs.

Jassy underscored that Gen AI to continue to be an area of “pervasive focus and investment across Amazon”, expecting “it will ultimately drive tens of billions of dollars of revenue for Amazon over the next several years”.

As AWS strides forward, the company's CFO anticipates this growth acceleration “continue into 2024”.

With an 155Bn in commits and focus on AI, it's no wonder that the AWS marketplace is experiencing such a momentum, as I’ve wrote in previous posts.

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