Amazon’s (AMZN - Free Report) cloud computing arm Amazon Web Services (“AWS”) continues to fortify market share in the cloud industry driven by improving clientele. This can be attributed to its innovative cloud products and services. Moreover, the offering of special discounts on long-term deals and advanced payments also help the company in attracting customers.
Recently, the company’s AWS solutions were selected by Formula One Group (Formula 1). This highlights the power and reliability of AWS services.
Per the deal, Formula 1 has opted for services such as Amazon SageMaker, AWS Lambda, AWS Elemental Media Services and AWS analytics services on AWS platform to leverage the machine learning and data analytics capabilities of these services.
These services will help Formula 1 to improvise business operations like data tracking systems, race strategies, video asset workflows and digital broadcasts.
With the help of Amazon SageMaker, Formula 1’s data scientists will be able to enhance their race predictions by extracting race performance statistics. Further, AWS Elemental Media Services will give a better visual experience to the viewers worldwide.
Rising AWS Adoption
Amazon’s strong focus toward improvement of its service portfolio will continue to add strength to customer base. Moreover, it will aid the company in sustaining its dominant position in the cloud market which holds immense potential and reap benefits from it.
Per a Gartner report, the global market for public cloud services is expected to grow 21.4% in 2018 from 2017 to exhibit revenues of $186.4 billion. Further, the revenues are expected to hit $302.5 billion in 2021 from $153.5 in 2017.
We note that the company is well poised to reap benefits from this rapidly growing market with the aid of its well performing AWS, which generated $5.44 billion revenues in the last quarter and improved 48.6% on a year-over-year basis. This was primarily due to its strong customer base and reliable services.
AWS has won quite a number of clients within a two months time frame. The latest being Formula 1. Few days back, zulily, an online retailer, also selected AWS and moved its majority of workloads to AWS.
In May, the company’s services were selected by three clients namely Verizon, Oath and Ryanair. All three of these companies have moved their infrastructure to AWS.
In April, Shutterfly also moved its infrastructure to AWS. Additionally, companies like GoDaddy, Cox Automotive, NextGen Healthcare, Amway, LG Electronics selected AWS during the first quarter. Notably, AWS customer base totaled 10K till the first quarter.
We believe improving adoption rate of AWS will continue to drive Amazon’s top-line growth and improve its market position.
Amazon’s continuous efforts to improve its offerings will continue to help it gaining momentum in the market.
The company has teamed up with Kaleido, a provider of blockchain business cloud service. The partnership will help the AWS customers to manage their blockchain projects at a higher speed.
Additionally, the company has recently announced the general availability of Amazon Neptune and Amazon Elastic Container Service for Kubernetes.
Driven by these endeavors, the company is likely to continue leading the cloud market and strengthening its competitive position against the likes of Microsoft’s (MSFT - Free Report) Azure, Alphabet’s (GOOGL - Free Report) Google Cloud and Alibaba’s (BABA - Free Report) cloud platform.
Per Synergy Research, AWS maintained its dominance in the cloud infrastructure services market and acquired 33% in the last quarter. Microsoft, Google and Alibaba gained share from small-to-medium sized cloud operators.
Notably, shares of Amazon have returned 45.4% on a year-to-date basis, outperforming the industry’s rally of 22.9%.
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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