Five billion dollars.
That’s how much Amazon.com (AMZN) will rake in from its cloud computing business this year, according to a new estimate from Pacific Crest Securities. If true, it’s an incredible figure. It would mean that Amazon’s cloud revenue shot up 58 percent in a single year, from $3.1 billion in 2013. In a research note, Pacific Crest says it expects the business to keep growing at a clip, with revenue hitting $6.7 billion in 2015. (Amazon does not break out its cloud revenue figures.)
The growth of Amazon’s cloud business is unprecedented, at least when compared to other business software ventures. It’s grown faster after hitting the $1 billion revenue mark than Microsoft, Oracle, and Salesforce.com. You would need to turn to Google (GOOG)—which had the advantage of the vast consumer market—to find a business that grew faster.
Most staggering to me is that Amazon’s cloud revenue now runs almost on par with VMware (VMW), which posted revenue of $5.2 billion last year. VMware has been the great story of the business software market over the past decade and an absolute sales juggernaut. It also totally reshaped the way customers structured their data centers and ran their applications. Amazon’s sales totals seem to confirm that the next era of computing has well and truly taken hold.
One more data point is that Amazon’s quarterly cloud revenue is starting to approach that of the traditional server makers. Revenue of $1.25 billion per quarter would have Amazon rank as the fourth-largest server company, trailing Dell, IBM (IBM), and Hewlett-Packard (HPQ), which respectively sell about $2 billion, $2.2 billion, and $2.9 billion worth of server hardware per quarter. (Not bad for a company that also sells jars of fat.)
It’s these hardware companies that need to keep convincing customers to buy their machines rather than just rent their computing by the hour. And this sell will only get harder with Amazon bringing the equivalent of the one-click buying model to enterprise products.