It goes without saying that with its array of web services, Amazon has transformed the computing landscape and nurtured what is generically known as the cloud computing industry. By turning expensive storage and computing hardware into a billable service, it has opened up new vistas for entrepreneurs and made corporations rethink how they build and use their computing and storage resources. The question often people ask: How much money is Amazon making from these web services? I’ve heard some wild estimates.
Today, UBS Investment Research analysts Brian Pitz and Brian Fitzgerald released a report which projects revenue numbers against Amazon’s web services. The duo estimate that in 2010, AWS will generate about $500 million in revenues and will grow this number to $750 million by 2011. By 2014, it would bring in close to $2.54 billion in revenues.
UBS analysts believe that the total market for AWS-type services will be between $5-to-$6 billion in 2010 and will eventually grow to $15-to-$20 billion in 2014. How they arrive at these numbers:
Of the twelve AWS product lines, only two (EC2 and S3) compete in this subcategory. AWS essentially ‘rents out’ IT infrastructure to companies that seek to outsource IT needs such as Application Hosting, Web Hosting, High Performance Computing, Storage, E-Commerce, and more. Amazon was one of the first entrants (3Q06), and is a top player in the rapidly growing market. (UBS Research Report)
They argue that while so far the AWS revenue has been small and immaterial when compared to the overall Amazon revenues (roughly $25 billion), that will change soon and AWS will contribute about 10 cents a share in earnings during 2010, and grow it to 22 cents in 2011. The …