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Amazon Web Services Buys Cloud9 to Boost Cloud Platform

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At the recent AWS Summit in Silicon Valley, Amazon Web Services (“AWS”), a subsidiary of AMZN, announced that it has acquired a popular web-based developer environment, Cloud9. The terms of the deal have not been disclosed.

More on Cloud9

Cloud9, a San Francisco-based startup was founded in 2010. The company offers an integrated development environment (IDE) for web and mobile developers to collaborate together.

The company allows teams in remote locations to work together to develop and edit code by using its online code editor or an Ubuntu workspace. The code is then tested across 300 different combinations of browsers and operating systems, giving coders adequate tools to build, test, debug, and run their own software.

Notably, Cloud9 supports almost 40 different programming languages. Its customers include Soundcloud, Atlassian and Inc. (CRM - Free Report) among others. The company is based in both Amsterdam and San Francisco and has less than 50 employees.

AWS-Cloud9 Deal Details

The buyout makes sense for Amazon considering that AWS is one of the big business generators at Amazon. Last year, the company saw increased utilization of its cloud assets, which drove both revenue and profits. In 2015, AWS generated over $7.3 billion in sales and had one million active users, which is a huge number.

Therefore, adding more services to AWS will expand the number of users and add more money into the company’s kitty.

Following the acquisition, Cloud9 will work on building new tools for AWS but will continue to offer its existing services.

Our Take

AWS is the biggest public cloud in the market. But competition in the cloud market is intensifying and so is the cloud storage war from the likes of Microsoft MSFT and Google GOOGL. But amid this war we remain extremely positive about AWS’s growth prospects. The latest acquisition is basically another feather in its cap.

Amazon currently sports a Zacks Rank #3 (Hold).

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