Amazon’s (AMZN - Free Report) cloud computing arm Amazon Web Services (“AWS”) is well poised to grow further in the global cloud market on the back of increasing clientele driven by its expanding and innovating cloud services portfolio.
Recently, AWS has been selected by National Australia Bank as its long-term cloud provider. This highlights the power and reliability of AWS services.
National Australia Bank is leveraging AWS’ robust compute, storage, analytics and database capabilities in order to shift above 300 of its applications to Amazon’s cloud infrastructure.
Further, the bank is utilizing Amazon Simple Storage Service, Amazon Redshift and Amazon Athena to build a data lake on AWS. Further, it is using Amazon GuardDuty to provide its customers with high security. Additionally, it intends to leverage Amazon Connect for the purpose of contact center migration.
AWS Gaining Traction
Per a report from Gartner, the global cloud market is expected to reach $206.2 billion in 2019, reflecting year-over-year growth of 17.3% compared with 2018.
We note that Amazon is capable enough to reap benefits from this rapidly growing market with the aid of its high-margin AWS, which generated $6.68 billion revenues in the last quarter and improved 45.7% on a year-over-year basis. This can be attributed to its strong customer base and reliable services.
The latest deal is in sync with the company’s effort to gain momentum among financial institutions. Recently, the company was selected by another bank called Open Bank, S.A., which will run its production workloads on AWS. Notably, the financial institutions are increasingly preferring the utilization of AWS infrastructure in their services.
Apart from these banks, AWS has acquired few more clients within a couple of weeks.The Guardian Life Insurance Company of America, Amgen, Korean Air Lines, Mobileye, Ellie Mae (ELLI - Free Report) and Pac-12 Conference are the other companies which have selected AWS for running the majority of their workloads and infrastructure.
Notably, increasing adoption of AWS will aid its revenue generation which in turn will drive Amazon’s top-line.
Coming to price performance, shares of Amazon have returned 51.5% on a year-to-date basis, outperforming the industry’s rally of 5.6%.
Strengthening Market Position
We believe the strengthening momentum of AWS among the customers will aid itin sustaining its dominant position in the cloud market. Notably, the competition is intensifying in this space primarily due to advances being made by the other cloud providers namely Microsoft’s (MSFT - Free Report) Azure and Alphabet’s (GOOGL - Free Report) Google Cloud.
Per the latest data from Synergy Research Group, Microsoft was the biggest gainer In the third-quarter 2018 with market share growing 2.5% while Amazon’s share increased by 1% in the cloud market. Meanwhile, Google witnessed an increase of 1%.
However, AWS catered to the majority of the cloud market. The market share for Azure was above 10% but less than 20%, meanwhile Google Cloud recorded less than 10%. But, AWS’ share was above 30%, thus maintaining its dominance and leaving rest of the pack trailing.
Currently, Amazon carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
(We are reissuing this article to correct a mistake. The original article, issued on December 3, 2018, should no longer be relied upon.)