How Amazon Is Secretly Making Billions


Amazon does more than what you think. | Leon Neal/Getty Images

How Amazon Is Secretly Making Billions

There’s noِ doubt aboutِ it: Amazon isِ a massive business success story.
Some ofِ Amazon’s initiatives, suchِ asِ its acquisition ofِ Whole Foods orِ itsِ plans toِ launch a secondِ headquarters, areِ common knowledge.
The Amazon Web Services division isِ one ofِ the company’s mostِ important — andِ one ofِ itsِ most lucrative.

1. Where Amazon Web Services fits in

Amazon isِ ranked No.
12 onِ the Fortune 500 andِ claimed $83.4 billion inِ total assets inِ its 2016 annual report.
We’ll cover justِ howِ much money Amazon Web Services contributed toِ theِ bottom line inِ a minute, butِ suffice itِ to sayِ itِ isِ a key driver forِ the company.

AWS is leading in operating income. | Amazon Web Services via Facebook

Next: An explanation

2. What does Amazon Web Services do?

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We haveِ webinars allِ this week! , 7 ] .

Posted by Amazon Web Services on Saturday, September 16, 2017

The question toِ askِ isn’t whatِ Amazon Web Services does, butِ what doesn’t it do.
Its product line isِ extensive andِ offers easy solutions forِ businesses ofِ allِ sizes.
By usingِ AWS, companies canِ eliminate (or atِ least lessen) theِ amount ofِ money spent onِ technology.

The retail site isn’t the only focus. | Philippe Huguen/AFP/Getty Images

Next: Important to the bottom line

3. Amazon Web Services is a key product

Make noِ mistake, direct-to-consumer sales areِ the major revenue stream forِ Amazon, toِ theِ tune ofِ $79.78 billion inِ 2016.
Yet whenِ itِ comesِ to actual income, it’s Amazon Web Services leading theِ way.
The international segment wasِ negative inِ operating income, andِ North America cleared $2.36 billion.

Next: You have to spend money to make money.

Many huge companies use AWS every day. | OhmZ/iStock/Getty Images

4. Amazon keeps investing in AWS

We’ve justِ seen thatِ Amazon Web Services isِ incredibly instrumental inِ the company’s business model andِ bottom line.
The company spent $6.7 billion inِ 2016.
Some ofِ that wentِ toِ fulfillment services, butِ Amazon Web Services received muchِ of thatِ money “in support ofِ continued business growth due toِ investments inِ technology infrastructure (the majority ofِ which isِ to support AWS),” according toِ Amazon’s 2016 annual report.

Next: So how does this impact you?

5. You’ve used Amazon Web Services without knowing it

Netflix requires AWS.  | Thinkstock

You don’t run a business andِ you don’t work inِ IT, soِ you’re probablyِ wondering whyِ you shouldِ care.
Well, you’ve probablyِ indirectly usedِ Amazon Web Services.
AWS serves moreِ than 1 million customers directly, andِ you’ve surely heard ofِ a fewِ of them: Airbnb, Comcast, Major League Baseball, Netflix, andِ Spotify areِ among theِ clients usingِ it.

Next: Let’s take a closer look at one of those major clients.

6. Netflix and chill couldn’t work without Amazon

Just asِ Amazon played a major part inِ revolutionizing theِ way people shop, Netflix didِ the sameِ with theِ way people watch movies andِ TV.
Netflix outsources nearlyِ allِ of itsِ IT needsِ to Amazon Web Services, andِ it hasِ helped Netflix enjoy tremendous growth.
“Amazon … processes multiple terabytes ofِ log data eachِ day, yetِ events show upِ inِ our analytics inِ seconds,” Netflix senior software engineer John Bennett said.

Next: Amazon Web Services is more important than ever.

7. Helping Amazon win the battle and maybe the war

In theِ world ofِ business, a major battle isِ alreadyِ unfolding withِ Walmart andِ Amazon takingِ aim atِ each other.
For itsِ part, Walmart isِ constantly lookingِ forِ efficiencies, suchِ asِ anِ easy-return system.
The battle betweenِ the two for consumer dollars couldِ beِ a fierce one, butِ no matter howِ it ends AWS willِ beِ there.

Next: You’ll hear more about AWS in the future.

8. Amazon Web Services isn’t going away

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Posted by Amazon Web Services on Thursday, September 7, 2017

No matter howِ the retail landscape changesِ in theِ future, Amazon isِ situated inِ a wayِ thatِ will makeِ itِ successful. AWS isِ a major reason why, andِ it’s a trend that’s pointing up. As Forbes notes, AWS accounted forِ a majority ofِ the profits inِ the firstِ quarter ofِ 2017.