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Amazon (AMZN) AWS Picked by Itau Unibanco, Cloud Service in Focus

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Amazon’s (AMZN - Free Report) strengthening cloud service portfolio is helping it gain customers.

Recently, the company’s cloud computing arm — Amazon Web Services (AWS) — has been selected as the long-term strategic cloud provider by Itau Unibanco Holding. This has strengthened Amazon’s cloud client base and expanded its presence in North America.

Itau Unibanco Holding, the largest bank of Latin America, is the latest client of AWS. The bank has approximately 56 million customers around the world.

Per the deal, Itau Unibanco will move the majority of its IT infrastructure to AWS. The bank will migrate all core banking platforms, call center solutions, online and mobile banking applications to AWS.

In addition, Itau Unibanco will leverage AWS’ machine learning services, analytics, compute, database, networking, serverless, storage and other services in order to accelerate digital transformation. AWS services will help the bank to pursue new lines of business, develop applications, and ensure security as well as regulatory compliance.

Itau Unibanco’s selection of AWS as its official cloud provider highlights the efficiency and reliability of AWS’ innovative cloud products, as well as services.

Portfolio Strength: A Key Catalyst

We believe AWS’ focus on enhancing service offerings is likely to drive momentum across customers.

AWS recently announced a new managed security service — AWS Network Firewall. The new service is well equipped to provide protection against common network threats such as intrusion prevention and detection, dynamic packet filtering, as well as web filtering.

The company also launched the preview of Amazon Braket, which is a fully-managed quantum computing service that enables customers to explore and experiment with quantum computing hardware.

Additionally, it announced a service called Amazon Managed (Apache) Cassandra Service. Further, the company made the new Amazon EC2 capability — namely AWS Nitro Enclaves — generally available. AWS Nitro Enclaves offers a trusted, highly isolated and hardened environment for processing highly sensitive data.

Bottom Line

Cloud computing has been emerging as a key technology to fight the battle against the coronavirus pandemic. This technology has been witnessing higher usage globally as it allows data interoperability in a scalable, cost-efficient way by data collection, processing, analyzing and sharing across platforms.

Amazon is the leading provider of cloud infrastructure as a service to enterprise customers. The expanding customer base of AWS driven by strengthening cloud offerings will continue to aid Amazon's dominance in the global cloud space.

Even more encouraging is the fact that AWS generates much stronger margins than the traditional retail business, which should remain a positive for the company’s profitability as it continues to grow in the mix.

However, the cloud market is becoming intensely competitive due to strengthening cloud initiatives by Microsoft (MSFT - Free Report) , Alphabet’s (GOOGL - Free Report) Google and Alibaba (BABA - Free Report) .

Microsoft is benefiting from momentum in Azure, and impressive growth in clientele triggered by coronavirus-led work from home, online learning wave, as well as tele healthcare trends. Furthermore, it is well poised to expand the total addressable market through the acquisition of GitHub.

Also, Alibaba’s cloud computing business has been gaining a lot of traction. It is a dominant force in China but has also gained traction in other regions. The company has opened new data centers across the world.

Currently, Amazon carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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