Monday 26 December 2022

AWS Could Hit $100 Billion Revenue Milestone In 2023

Total sales from Amazon Web Services over the next 12 months will likely surpass $100 billion if the cloud giant can generate a similar growth rate as it did in 2022.

If Amazon Web Services grows sales at a similar rate in 2023 as it did in 2022, the cloud market share leader will surpass the $100 billion threshold next year.

In fact, even if AWS doesn’t grow cloud revenue as high in 2023 compared to over the past 12 months, the company could still reach the $100 billion milestone.

“I’m really looking [forward] to 2023,” said AWS CEO Adam Selipsky in a letter this week to all AWS employees. “I come to the office every morning excited about the innovation we spark, the transformation we drive, and the impact we have. … I look forward to the year ahead with you all.”

Over its past four quarters—from fourth quarter 2021 to third quarter 2022—AWS generated $76.5 billion in revenue.

On average, Seattle-based AWS increased quarterly sales by approximately 34 percent year over year each quarter.

This means if AWS revenue grows 34 percent over the next four quarters, the Amazon cloud computing unit will generate approximately $102.5 billion in total revenue.

AWS Quarterly Sales, Growth Rate And 2023 Figures

Here is a breakdown of AWS sales growth and total revenue over the past 12 months:

AWS’ first quarter 2022 sales were $18.44 billion, representing a year over year increase of 37 percent. If AWS witnesses the same 37 percent sales growth next year, AWS will generate $25.26 billion in sales during first quarter 2023.

AWS’ second quarter 2022 revenue was $19.74 billion, an increase of 33 percent year over year. If the company generates a similar 33 percent growth rate next year, AWS will capture $26.25 billion in revenue in its second quarter of 2023.

AWS’ third quarter 2022 sales were $20.54 billion, up 27 percent year over year. If AWS sees the same 27 percent growth next year, AWS will generate $26.09 billion in sales for its third quarter 2023.

Amazon typically reports its fourth quarter financial results in early February.

For AWS’ fourth quarter 2021, sales reached $17.78 billion, an increase of 40 percent year over year. If AWS sees similar growth during its current fourth quarter 2022, AWS sales will hit $24.89 billion.

When adding up these quarterly sales projections, AWS revenue will reach approximately $102.5 billion over the next four quarters.

AWS Expects No Slowdown In 2023 Despite Economic Uncertainty

Due to various factors—from inflation to Russia’s ongoing invasion of Ukraine—some economic experts are predicting a modest recession in 2023.

During an on-stage interview with CRN Executive Editor Steven Burke at AWS re:Invent this month, Adam Selipsky said cloud computing and AWS innovation will help customers through get through any economic troubles next year.

“There’s this uncertainty in the air,” said Selipsky. “A lot of people are asking, ‘Should we slow down? Should we pause?’ No. Now’s the time to lean in harder.”

“Not in spite of it, but because of the economic uncertainty, our end customers will save money when they dig into cloud versus running those applications on different types of infrastructure,” said AWS’ CEO.

Selipsky said AWS customers have more financial flexibility and can innovate more from a cost efficiency standpoint if they leverage cloud computing.

“[We are] working together with our end customers to make sure that everybody knows that now is the time to continue to accelerate the cloud journey,” he said.

Public Cloud Services To Hit Record $592 Billion In 2023

IT research firm Gartner is projecting total worldwide end-user spending on public cloud services to reach a record $592 billion in 2023.

“Cloud migration is not stopping,” said Sid Nag, vice president and analyst at Gartner in a statement.

The $592 billion in public cloud services spending would represent a 21 percent increase in annual growth compared with $490 billion in 2022, according to Gartner data.

“Current inflationary pressures and macroeconomic conditions are having a push-and-pull effect on cloud spending,” Nag said. “Cloud computing will continue to be a bastion of safety and innovation, supporting growth during uncertain times due to its agile, elastic and scalable nature.”

AWS Partners Witnessing Massive Growth

If AWS partner sales are any indicator of what’s ahead in terms of growth for AWS in 2023, all signs are pointing to a $100 billion year.

AWS channel partner Triumph Technology Solutions is on pace to grow AWS sales by a whopping 500 percent in 2022 compared with 2021.

“We’re continuing to grow and scale in a global pandemic, a pending global recession—it doesn’t matter,” Victor Raymond, CEO of Philadelphia-based Triumph Technology Solutions, told CRN. “We’re still growing with AWS. We’re still hiring.”

“Even going into next year with financial uncertainty in the economy, the cloud is the place to be,” Raymond said. “And AWS is the cloud to be on.”

AWS partner Innovative Solutions is projecting AWS revenue to climb north of 300 percent in 2022 compared to 2021, with similar growth forecasted for 2023.

Innovative Solutions CEO Justin Copie told CRN there will be millions of net-new services dollars available for his company in 2023 as AWS customers accelerate their cloud migration initiatives around modernization.

“There’s going to be this huge wave of customers that need good management of those cloud-based services next year because they don’t have the IT skills on staff,” Copie said. “Partners who offer managed services like us are going to be well positioned to be able to catch those customers and help usher them into the future.”


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