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Amazon SaaS Subscriptions Available on AWS Marketplace

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Amazon.com, Inc.’s (AMZN - Free Report) Amazon Web Services (AWS) has made AWS Marketplace a one-stop solution for customers who subscribe to third party Software-as-a-Service (SaaS) and Application Programming Interface (API) products through AWS.

The company announced yesterday that it has enabled subscription to Software-as-a-Service (SaaS) applications directly through AWS Marketplace.

What Does it Mean

Previously, independent software vendors (ISVs) offering SaaS application to AWS customers were required to have their own metering and billing system or avail a third party billing system.

Now AWS has developed a unified metering and billing system that will make things easy and hassle-free for customers and vendors. Vendors can put their charges in a customer’s existing AWS bill, thereby saving costs and accelerating the sales cycle.

Customers on the other hand get a streamlined payment system. They will have to pay a single monthly bill that includes SaaS usage charges and charges for other AWS products and services. This eliminates the need to maintain accounts with each ISV from which they source products.

At launch, AWS has 24 products from 21 sellers - Aspera, Avalara, Alert Logic, Bitium, Cloudyn, Cloudinary, Dome9, Druva, Datadog, Datapath.io, HERE, Pitney Bowes, Qubole, NetApp, New Relic, Solodev, Sumo Logic, Trend Micro, Dynatracea and Signiant, Solano, and expects further additions in the coming months.

The company stated that following the launch, vendors and customers will have greater access to each other with more products available in its marketplace.

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AWS Holds the Key

We see the move as Amazon’s latest gambit to increase its market share in the lucrative cloud computing business. It intends to give both sellers and customers a solid reason to opt for AWS.  

Amazon Web Services is the cash cow for Amazon. The business contributed $3.2 billion in the third quarter. It generates much higher margins than retail and therefore has a positive impact on Amazon’s profitability. We remain optimistic about the functionality, partner ecosystem and the experience AWS offers and believe this will lead to continued customer wins.

Amazon remains the cloud infrastructure leader, well ahead of Microsoft and Alphabet.

Zacks Rank and Stocks to Consider

Currently, Amazon is a Zacks Rank #3 (Hold) stock. Better-ranked stocks in the in the broader technology sector include NVIDIA Corporation (NVDA - Free Report) , Kimball Electronics, Inc. (KE - Free Report) and Control4 Corporation (CTRL - Free Report) , each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

For the current year, the consensus estimate for NVIDIA has gone up by 30.6% in the past 30 days. Estimates for Kimball Electronics and Control4 have gone up by 8.1% and 10%, respectivelyover the same time frame. 

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