IBM And SAP Score Win Over Amazon | Tech Industry

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Amazon’s disclosure of its Amazon Web Services financials fills in a big piece of the cloud financial picture that revolves around a bevy of giants all claiming to be the biggest as-a-service kid on the block.

Unfortunately, it’s difficult to declare a winner since every cloud player has its own math. So much for standards kids. But given I can’t really resist an apples and oranges cloud face-off I’m going to give this a shot.

For our purposes, we’ll look at the four biggest hyperscale cloud providers. Amazon, Google, Microsoft and IBM. We’ll toss in some over-the-top cloud players such as Salesforce, which is a bit hard to ignore, with Oracle, which also breaks out its various as-a-service cloud efforts nicely and includes infrastructure and platform. For simplicity, this back-of-the-envelope effort is focused on the various flavors of as-a-service revenue.

Given those moving parts, here’s what we know so far.

Amazon Web Services is on an annual run rate of $6.26 billion, but that figure is low unless you assume that the cloud vendor isn’t going to grow in the quarters ahead. Amazon reported AWS sales of $1.566 billion in the first quarter, up from $1 billion in the same quarter a year ago. Operating income for AWS was $265 million. For context, Amazon’s North American sales were $13.4 million with an operating profit of $517 million. It’s safe to say that all the margin power within Amazon resides with AWS. In terms of profit potential, Amazon is a cloud infrastructure provider disguised as an e-tailer. For 2014, AWS was a $5 billion .

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IBM claims that its 12-month rolling revenue is now on a more than $7.7 billion run rate. The catch? IBM’s big cloud number includes everything from services to gear to managed services. It’s a hybrid cloud world so IBM may have a point with its $7.7 billion figure. However, I chose to look at what IBM calls its “as a service revenue,” which is now on a $3.8 billion run rate. That as-a-service figure includes software as a service as well as platform and infrastructure.


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