Amazon Web Services is poised top $1 billion in cloud services revenue in 2012, according to a new report from research firm IDC that underscores the rise of cloud computing across the tech industry, and the increasing significance of AWS to the Seattle-based online retailer.

Google’s cloud-based enterprise technology business should reach that milestone 18 months later, the firm predicts.

As noted by Business Insider, neither company currently breaks out revenue for the cloud portion of its business. Amazon’s net sales were $32 billion last year, and Google’s revenues were $29 billion, the cloud numbers are still a relatively small percentage for each.

The IDC report also predicts increased acquisitions and M&A activity in 2012 in cloud computing:

Competition will also characterize the world of cloud services in 2012 as the strategic focus shifts from building infrastructure to the creation of application platforms and ecosystems. Here the battle for enterprise platform dominance is just getting underway with established players like IBM, Microsoft, and Oracle facing serious challenges from Amazon, Google, Salesforce.com, and VMware. As evidence of this challenge, IDC expects Amazon Web Services to exceed $1 billion in cloud services business in 2012 with Google’s Enterprise business to follow within 18 months. IDC also expects a merger and acquisition (M&A) feeding frenzy as these companies seek to gain a competitive edge. Look for Microsoft to buy a content/media cloud, like Netflix, to provide a marketplace for its apps and content. Other prime targets for acquisition include Cloud Application/SaaS companies, like Workday, NetSuite, and Taleo.

 

Comments

  • Arlington Albertson

    See, this here is what is wrong with the current tech bubble. You have companies like Amazon which are providing MASSIVE levels of service to a LOT of companies (Dropbox, Netflix, etc…) and their “cloud” business is only bringing in $1B, for the YEAR. Now granted, this is not the “valuation” and just the raw hard cash they are pulling in. 

    But then you compare that to the ridiculously STUPID valuations of Facebook, Groupon, etc… where they don’t even have anything truly WORTH that kind of money yet they are pulling in valuations of upwards of $100B?! How is that even sane?! No wonder there is such worry about this bubble popping.

    Now all that being said, I sure wouldn’t mind getting my own startup going and getting a nice fat valuation like that or getting bought out for a few billion LOL….

    /rant.

    • Buntu4

      Facebook has a huge potential to grow and generate more revenue that 
      Amazon Web Services.

    • Guest

      Yeah, Amazon is only sporting a PE of 100. Why is the market being so stingy? /s

  • Guest

    Congratulations to Amazon Web Services on reaching this fortuitous milestone! This is proof of Jeff Bezos’s long-term vision coming to fruition. A lesser mind would have abandoned Amazon Web Services when it was only making pocket change just a few years ago.

  • Guest

    “Companies like Microsoft, HP, SAP, RIM, and others – including Apple – will
    face ‘crossroads moments’ in 2012. By the end of the year, we should have a good
    idea which vendors will – and won’t – be among the industry’s leaders at the end
    of the decade.”

    I’d say we already know Apple will be, and MS, RIM, SAP wont be. HP is still up in the air.

    • Guest

      Yeah, Apple isn’t going to face any crossroad moment in 2012. They’re well positioned to dominate another entire decade. Google, IBM, and Oracle are all long term survivors as well. RIM gets sold in 2012. SAP gets bought by IBM within three years. HP might survive the decade as well, but as a lesser player. And MS’s valuation collapses in 2012 as Office joins Windows in decline. By the end of the decade MS will have been absorbed by IBM.

      • Guest

        Once the Steve Jobs product backlog runs out in 2014, and after Jonathan Ive moves to Microsoft in 2016 (which will then be called “Compupro Solutions”), I expect Apple to be dead by 2018. They’re already being outsold in smartphones, computers, software, and services; how long can that last?

        • Guest

          They have several capable visionaries beyond SJ and a culture that demands innovation and excellence. Leaders come and go, but cultures are far more enduring. That, the huge momentum they have in every market outside iPod, and what’s now about $100 billion in cash with zero debt, should serve them very well.

          What you see as being outsold actually equals the opportunity, as it has in PCs where they have been outsold for a decade. And of course they’ll enter and disrupt new markets. Next up: TVs and the living room businesses of MS and Sony that both currently think are unassailable. Some people just never learn.

          What would Ive do at MS in 2016? If MS hasn’t already been bought by then, it will certainly have retreated back to the enterprise. That’s not exactly Ive’s comfort zone.

          The CompuPro Solutions reference for MS went over my head.

          • Guest

            Thank you. In a world of so many cynics, it’s heartening to know that there are those who believe in a company that can truly disrupt — in a positive sense — our way of life.

  • http://twitter.com/lunarmobiscuit Michael ‘Luni’ Libes

    Kudos to Amazon for creating a great service, disrupting the server hosting model, and making it possible for companies like Dropbox, Netflix, and tens of thousands of others to easily and cheaply deploy their IT infrastructure.

    Five years from zero to $1 billion in revenues is quite impressive, to my knowledge bested only by Apple and it’s amazing run of iPod, iPhone, and iPad.  Then again, we don’t know the breakout numbers for Kindle.

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