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Microsoft Is Taking On Amazon’s Profit Center


The following is an excerpt from Jamal Carnette | August 13, 2018 | ibtimes.com |

Amazon (NASDAQ:AMZN) investors likely know the company's most visible business — e-commerce operations — isn't its most profitable. Instead, the company's smaller cloud business, Amazon Web Services (AWS), is its most profitable on account of higher margins. Last fiscal year, AWS produced 105 percent of Amazon's operating income as losses in international retailing offset North American retailing profit.

This article originally appeared in the Motley Fool.

Therefore, it's key for investors to pay close attention to Amazon's market position in cloud computing. Increasingly, the cloud has become a more-competitive industry, with second-largest provider Microsoft (NASDAQ:MSFT) starting to pick up market share. Do Amazon investors have anything to fear?

Gartner found Microsoft is gaining on Amazon

Per Gartner, the worldwide public infrastructure-as-a-service industry continues to post torrid growth rates, as spending increased 29.5 percent in 2017, growing from $18.2 billion to $23.5 billion. No surprise that Amazon continues to significantly lead this industry with a 51.8 percent market share. However, Amazon's lead over its peers continues to narrow, as the company lost 1.9 percentage points of share this year.

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