Amazon Web Services (AWS) made up half of the vendor’s overall operating income in its first quarter of the year.
Cloudy services grew its operating income by 59 percent to $2.2 billion which was an increase from $1.4bn in the same period in 2018.
Amazon’s net sales grew 17 percent to $59.7 billion in the first quarter its slowest since 2015.
AWS’ net sales saw a slower growth rate of 41 percent to $7.7 billion, compared with the 49 percent growth it experienced during the same time last year.
Amazon CFO Brian Olsavsky admitted that growth was slowing down and that the first half of 2019 is going to be pants compared to last year’s high growth in first and second quarters.
“It’s not only dependent on us, but it’s also dependent on the companies that are adopting AWS. “So there are differences in sales cycles. There are differences in the adoption of the cloud. There are differences in migration patterns that will make any quarter-to-quarter movements lumpy. So we’re happy with the growth”, he muttered.
The CFO said Amazon was still reaping the rewards of substantial investment in 2016 and 2017, adding that this investment model would see a return this year.
Amazon set its second-quarter guidance in the range of $2.6 billion to $3.6 billion for the second quarter, well below the $4.2 billion that Wall Street expected.
“We have some impressive gains and efficiencies in both the warehouses and also the datacentres. Every percentage use in our datacentres is worth tens and more millions of dollars. So again, that’s a big part of our model. It is not only investing, but also working on efficiencies, adding new products and features for customers”, Olsavsky said.
“And as we lower costs, we pass those along to customers, either through new rates or new deals that we have. It will be increasing as we move through the year. Moreover, that will be a constant battle between growth, geographic expansion in AWS and also efficiencies to limit how much we need”, he added.
