Amazon Web Services [AWS] reports sluggish growth as customer cost-cutting continues 

Tech companies are not out of the woods yet as recession continues to bite despite the green shoot here and then. Amazon’ AWS reported 20% for the quarter over the prior year to $21 billion. The move comes after the majority of customers continue with cost cutting. 

“As we look ahead, we expect these optimisation efforts will continue to be a headwind to AWS growth in at least the next couple of quarters. So far in the first month of the year, AWS year-over-year revenue growth is in the mid-teens,” said CFO Brian Olsavsky. 

“So on the AWS growth rate, I’m not sure I can forecast for you with any level of certainty what is going to happen beyond this quarter. This is a bit of uncharted territory economically. And as we mentioned, there’s some unique things going on with the customer base that I think many in this industry are all seeing the same thing,” he said. 

Olsavsky added: “That said, stepping back, our new customer pipeline remains healthy and robust, and there are many customers continuing to put plans in place to migrate to the cloud and commit to AWS over the long term.”

Amazon Group CEO and former AWS boss Andy Jassy said despite the current downturn, he is positive that the market will turn around hopefully soon.

“So I think it’s also useful to remember that 90% to 95% of the global IT spend remains on-premises. And if you believe that, that equation is going to shift and flip,” says Jassy.  

“I don’t think on-premises will ever go away, but I really do believe in the next 10 to 15 years that most of it will be in the cloud…It means we have a lot of growth in front of us in the AWS business,” he added.

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