AWS cloud growth slows as Amazon announces investments in renewables and Prime

AWS growth disappoints as Amazon announces windfarm in Scotland and continues to push Prime

Amazon has announced year-on-year growth of 35 per cent for AWS, along with new investments in renewable energy sources and a push for its Prime delivery service.

Amazon's AWS IaaS/PaaS cloud continues to grow at double-digit rates, but the pace of growth is declining and Microsoft Azure is catching up. Announcing its Q3 financial results, the world's largest cloud provider said that AWS grew 35 percent year-on-year, compared to an annual growth rate of 46 per cent to the same period in 2018.

The latest figures show $8.99 billion in AWS sales for the quarter, with an operating income of $2.26 billion for the quarter for the cloud business. The results were below analysts' forecasts, and Amazon's share price fell on the news.

This week, Microsoft published figures for Azure that showed a 59 per cent year on year growth (GAAP) in Azure revenues, although like-for-like comparisons are not straightforward. Most analysts believe AWS is about twice the size of Azure.

Amazon has been investing heavily in its consumer subscription service Prime, spending $800 million on the initiative up to Q2 as it looks to expand and improve its one-day delivery offering.

"Customers love the transition of Prime from two days to one day — they've already ordered billions of items with free one-day delivery this year," CEO Jeff Bezos wrote in a letter to shareholders. "It's a big investment, and it's the right long-term decision for customers."

In a separate announcement Amazon said it is investing in renewable electricity generation at three new locations as part of its stated commitment to power 80 per cent of its operations using renewable energy by 2024 and 100 per cent by 2030, and becoming net zero carbon by 2040.

The investments include a power purchase agreement (PPA) for a new wind farm on the Kintyre Peninsula, Scotland. The company is also financing solar projects in the US North Carolina and Virginia in the USA.