Amazon says it will start reporting revenue for Amazon Web Services (AWS) as a standalone category that is separate from the umbrella "Other" category it was previously lumped with.
At the company's quarterly conference call on Thursday, Amazon vice president of finance for its global consumer business Brian Olsavsky announced that beginning in the first fiscal quarter of the year, Amazon will report separate revenue figures for its AWS cloud enterprise services. Previously, AWS revenue was reported under the "Other" category, along with co-branded credit card agreements in advertising services.
"We just think it's an appropriate way to look at our business in 2015," said Thomas Szkutak, Amazon senior vice president and chief financial officer to retire and be replaced by Olsavsky in June.
For the fourth quarter of last year, Amazon posted revenue of $1.7 billion for the "Other" category, including AWS. The figure is up 43 percent from the revenue of $1.2 billion posted from 2013's last quarter. Full-year figures jumped 45 percent from the previous year, with the "Other" category earning $5.4 billion in revenue compared to the $3.7 billion of 2013.
It is unclear how much of those earnings can be attributed to AWS, but Amazon reveals it had one million customers using at least one of its cloud-based enterprise tools during a recent one-month period. Moreover, usage growth increased a whopping 90 percent, while Amazon introduced 80 percent more features from the previous year. Amazon also said it invested $1.44 billion in property and equipment for the last quarter alone. Its total investment in the category for the entire year is $4.89 billion, compared to the $1 billion investments of Amazon competitors.
The impetus for Amazon to break out its AWS is unclear. Under federal accounting standards, companies are required to break out segments of its revenue, profits, and assets if it exceeds more than 10 percent of the companies' overall earnings. Total revenue for Amazon for 2014 is $29.33 billion, so it's not likely Amazon was pressured by regulators.
Amazon is the pioneer of cloud-based tools and services that allow online entrepreneurs to set up their websites without needing to have the necessary hardware. Plenty of big businesses online, including Netflix, Reddit, Adobe, and Pinterest, use AWS services for their daily operations. However, analysts, competitors, and cloud watchers simply relied on estimates by research firms to get a vague idea of how much of an impact AWS has on the cloud industry. At one point, DeepField Networks estimated that 1 percent of the entire traffic on the Internet, which represents a huge amount of traffic, passed through AWS.
