AWS warns customer cloud demand is slowing as Amazon results stutter

Grace Will October 28, 2022

1 minute read

AWS warns customer cloud demand is slowing as Amazon results stutter

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Amazon Web Services (AWS) has reported third-quarter revenue growth of 27.5%, its slowest year-on-year rise since the company began reporting its finances separately in 2014.

The cloud giant’s revenue for the quarter was $20.5 billion, while AWS’s operating income was $5.4 billion, a year-on-year rise from $4.9 billion in the third quarter 2021.

Despite cooling growth, AWS’s performance still outstripped the growth of the tech giant more broadly, which posted a Q3 2022 revenue of $127.1 billion, a 15% year-on-year increase.

Why the slowdown?

In a call with analysts reported by The Register (opens in new tab), Brian Olsavsky, Amazon’s chief finance officer attributed the slowdown to “ongoing macroeconomic uncertainties” which have “seen an uptick in AWS customers focused on controlling cost”.

Skyrocketing energy costs were also highlighted as an issue that AWS is struggling with in an analyst call, with Olsavsky saying these are “materially higher … up more than 2x over the last couple of years.”

Regardless of its recent results, AWS still controls a massive chunk of the cloud computing pie.

Amazon Web Services (AWS) controlled 33% of the entire cloud services market (opens in new tab) in the first quarter 2022, according to Statistica.

What’s next for AWS?

Despite already making massive profits, the company still has multiple avenues towards growth.

AWS has recently begun offering EC2 instances based on its own line of self-manufactured Gravition chips, which use licensed-ARM technology as opposed to the Nvidia or AMD chips it has traditionally relied on.

AWS is a company that could soon have a much larger footprint in the UK, in 2022 AWS has been actively recruiting tech-focused roles in Edinburgh and Cambridge, in addition to corporate and warehouse roles in London and Manchester.

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