This one chart gives you an idea of how crazy Amazon's cloud growth really is (AMZN)
Amazon Web Services turned out to be a profitable, fast-growing cloud computing juggernaut when it first revealed its financials earlier this year.
But this chart by market research firm MKM Partners should give you a better idea of exactly how impressive AWS's growth has been compared to some of its enterprise IT peers:
MKM Partners
AWS is seeing 78% year-on-year revenue growth, an astonishing growth rate compared to other large cap enterprise vendors on this list that had an average growth rate of a mere 6%. That's more than double the growth rate of Salesforce — arguably the fastest growing cloud software maker — and doesn't even come close to some of the old guards like Microsoft, Oracle, and SAP.
Of course, AWS is a relatively new service, having launched in 2006, so it's hard to compare it apples to apples with other companies mentioned on this list, who tend to have a longer operating history. But it's simply unprecedented to see a business of its size, projected to exceed $8 billion in revenue this year, to keep up its growth rate at that level.
On top of that, AWS is seeing a solid 23% operating margin, which is in-line with the industry average and far better than Salesforce, HP, or NetApp.
Based on this growth rate, MKM Partners projects AWS to book over $38 billion in revenue by 2020, with a healthy 35% operating margin. That's pretty crazy considering Oracle had just about $38 billion in revenue last year, and AWS is still just a smaller part of Amazon's overall business that generated $88 billion in total revenue last year.
"We consider the rise of AWS as the most consequential development in the IT sector in many decades," MKM Partners wrote in a note. "AWS is by far the fastest growing large-scale supplier of technology to enterprises today."
Wall Street has been in love with Amazon shares since it first broke out numbers for AWS in April. Its stock is trading nearly 70% higher since then, with its market cap going from around $185 billion to over $300 billion now. Deutsche Bank recently estimated AWS to be a $160 billion business if it was a standalone entity.