Amazon Web Services (AWS) moved to reassure markets that its new customer pipeline remains “healthy and strong” after its parent company reported Another inferior set of financial results.
Amazon.com reported quarterly revenue of $149.2bn for the three months to 31 December 2022, representing 12% year-on-year (YoY) growth, and a full-year loss of $2.7bn. By comparison, the company made a profit of $33.4 billion in the previous fiscal year.
Revenue for its public cloud arm, AWS, rose 20% year over year, reporting $21.4 billion in revenue for the quarter.
this Marks another quarter of sluggish growth for AWSAs the company’s performance continued to decline due to a slowdown in enterprise cloud spending.
During a conference call with analysts, transcribed by Looking for an alphaBrian Olsavsky, Amazon’s chief financial officer, said the results reflect the fact that “enterprises of all sizes” are reducing their cloud spending due to “difficult macroeconomic conditions.”
“Our customers are looking for ways to save money, and we spend a lot of our time helping them. This customer focus is in our DNA and informs how we think about our customer relationships and how we partner with them for the long term,” he said.
This slowdown in demand for its services is a trend, he acknowledged, that began in the middle of the third quarter of 2022 and looks set to continue into the company’s new financial year.
“So far in the first month of the year, AWS’s YoY revenue growth is in the mid-teens. That said, going back, our new customer pipeline remains healthy and strong, and many customers continue to plan to migrate to the cloud and commit to AWS for the long term,” he said.
During the call, Amazon.com CEO Andy Jassy also said that AWS’s slow revenue growth is a sign that enterprises are using the cloud the way it was always intended to be used, in terms of being able to scale accordingly.
“One of the advantages of the cloud is that when it turns out there’s a lot more demand than you expected, you can scale seamlessly,” he said.
“But if it turns out that you had as much demand, you can return it and stop paying for it. And that resiliency is extraordinary, it’s something you can’t do on premises, which is one of the many reasons the cloud and AWS are so useful for customers.”
And the fact that the company is actively helping customers reduce their spending in these times of economic uncertainty is also a demonstration of its commitment to building long-lasting relationships with them, he added.
“We’re not focused on trying to optimize in any one quarter or any one year — we’re trying to build a set of business relationships that transcend all of us.”