Amazon announced that its cloud computing unit Amazon Web Services or AWS, despite having $85 billion annualized revenue run rate, faces short-term headwinds right now.
According to the e-commerce and tech major, the companies who opt for AWS services are being more cautious in spending amid the challenging, current macroeconomic conditions.
Meanwhile, a filing with the U.S. Securities and Exchange Commission noted that CEO Andy Jassy’s compensation actually paid for 2022 was negative $148 million, largely attributable to the 2022 decline in value of restricted stock units scheduled to vest over the next 8 years. His 2022 realized compensation declined by 25% from 2021.
Jassy in his annual letter to shareholders noted that AWS, which began offering IT infrastructure services to companies in 2006, is still early in its adoption curve, but at a juncture where it’s critical to stay focused on what matters most to customers over the long-haul.
Regarding the current issues, Jassy said, “While these short-term headwinds soften our growth rate, we like a lot of the fundamentals that we’re seeing in AWS. Our new customer pipeline is robust, as are our active migrations. Many companies use discontinuous periods like this to step back and determine what they strategically want to change, and we find an increasing number of enterprises opting out of managing their own infrastructure, and preferring to move to AWS to enjoy the agility, innovation, cost-efficiency, and security benefits.”
Amazon noted that AWS sales and support teams are helping customers optimize their AWS spend so they can better weather this uncertain economy.
In fiscal 2022, the unit which offers cloud computing services recorded 29% year-over- year growth in revenues to $80.10 billion.
Amazon said it is investing in AWS, which offers a broad set of on-demand technology services, including compute, storage, database, analytics, and machine learning, and other services, to developers and enterprises of all sizes.
Amazon is also investing heavily is Large Language Models or LLMs and a newer form of machine learning, called Generative AI. AWS is offering the most price-performant machine learning chips in Trainium and Inferentia so small and large companies can afford to train and run their LLMs in production, it said.
The company further stated that grocery is a big growth opportunity.
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