Where Amazon.com, Inc. (NASDAQ:AMZN) Web Services Is Headed To In 2017

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Where Amazon.com, Inc. (NASDAQ:AMZN) Web Services Is Headed To In 2017

So far, Amazon.com, Inc. (NASDAQ:AMZN) Web Services has proved to a be a success despite many years of pessimism over its performance. In its most recent quarterly report, the cloud service arm of the online retail giant improved its revenues by 55% in a year to almost hit the $13 billion mark. And despite claims that it was a loss-making unit, AWS reported profits of $1.02 billion in the same quarter. While this profit figure was exclusive of employee stock compensation, the cloud service firm still managed a profit of $821 million which was an improvement from the $428 million it had made the previous year.

Competitors in the rear-view mirror

The future for Amazon Web Services will, however, not be easy sailing all through. This is because rivals are gearing up to compete with Amazon and have heavily invested in their public cloud offerings by building data centers all over the globe, for instance. A case in point is Microsoft Corporation (NASDAQ:MSFT) which has made considerable strides and is now positioned second to Amazon in cloud services provision. International Business Machines Corp. (NYSE:IBM), Alphabet Inc (NASDAQ:GOOGL), and other tech companies are meanwhile battling it out for a third position.

To stay ahead of the competition, Amazon Web Services will have to continue courting IT professionals who have made it into what it is today. One of the things AWS has done in this regard is to develop new products that could potentially take business away from VMware, Inc. (NYSE:VMW) virtualization software and Oracle Corporation (NYSE:ORCL)’s databases. It is not an easy task though as Forrester Research’s principal analyst, Dave Bartoletti disclosed.

“Every year one goal for most companies is to reduce spending on Oracle and VMware, and every year IT comes back and say ‘we didn’t do it.’ That’s because to reduce spending on Oracle and VMware requires risk and money,” Bartoletti told Fortune.

Cloning the competition

But as difficult as it is, Amazon is already throwing salvos. It has done this by, among other things, introducing a clone of the Oracle-owned database, MySQL.  A physical data-moving truck, and a product that will allow VMware customers to run their VMware tasks on Amazon servers are other innovations geared towards this goal.

In Thursday’s trading Amazon.com, Inc fell by 0.90% to close the day at $765.15 a share.