The Blockbuster Growth of Amazon's Cloud Business

Being widely known for its namesake online shopping platform, many people would be surprised to hear that one of Amazon’s most successful, and certainly its most profitable operating segment has nothing to do with online shopping.

In the first nine months of 2019, Amazon Web Services, the company’s cloud platform providing the technical backbone for countless online services you may use, accounted for 13 percent of Amazon’s net sales and 62 percent of the company’s operating profit.

As the following chart illustrates, AWS has been a major growth driver for Amazon recently. Over the past five years, the company’s cloud business grew nearly eightfold, lifting the e-commerce giant’s profits to levels that would be hard to achieve in its low-margin core business.