If You Still Call Amazon an Online Retailer, Here's One More Reason to Stop It depends heavily on its cloud business, not ecommerce.
By Stephen J. Bronner •
Amazon is staggeringly good at selling things online. In just North America last year, the company generated $2.8 billion in operating income. That's a 20 percent jump from 2016, according to a release connected to its latest earnings report.
But, that's not the complete picture. It's still-growing international sales segment saw a $3 billion loss in operating income.
Related: The Surprising Ways Amazon, Apple and Microsoft Really Make Their Billions
Thank goodness for Amazon Web Services. The company's cloud division helped propel Amazon to some of the best numbers in the company's history. The cloud service saw $17.5 billion in net sales last year. After expenses, the division still brought in an operating income of $4.3 billion, a 39 percent increase from 2016, ensuring a total annual net income for the company of $3 billion.
And this segment of Amazon's business will continue to grow. The company announced several high-profile clients for AWS in its report, including Disney, Turner, Symantec and the NFL. Amazon also expanded AWS infrastructure in France and China, and plans to open new zones in Bahrain, Hong Kong and Sweden between now and early 2019.
The company is also expanding its AI offering to include transcribing and translating services and deep-learning powered video analysis. It also announced AWS Media Services, which will provide cloud tools for video providers.
Related: Here's How You Can Use Alexa at Work
Amazon also further entrenched itself in the workplace with Alexa for Business.
While the company continues to burn money in its bid to get the world to buy everything from the "everything store," it will have AWS propping it up.
Of course, Amazon's incredibly strong retail segments are still essential to the company and only part of its many growing offerings. The lesson for entrepreneurs is to watch how AWS's growth and continued success is helping the company invest and make inroads in AI, international ecommerce or media that many other companies can't.
"Our 2017 projections for Alexa were very optimistic, and we far exceeded them," said Jeff Bezos, Amazon's CEO and founder, in a statement. "Expect us to double down."
