AWS Warns of Reduced Cloud Demand

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The cloud arm of commerce giant Amazon expects customers to try to save money in the coming months. Rising energy costs also do AWS no good.

The warning comes after the reporting of financial data for the third quarter. Amazon Web Services was able to present a growth in revenue of 27.5%. That’s a lot, but it’s the slowest year-over-year growth the company has reported since it submitted its numbers in 2014. In total, AWS has revenues of approximately $20.5 billion.

Amazon CFO Brian Olsavsky blames slowing growth in an analyst call on current “macroeconomic uncertainties,” which drive AWS customers to try to save where possible. These uncertainties then indicate, among other things, rising energy costs and inflation. But, of course, the cost of electricity internally is also a factor for the cloud giant itself. Olsavsky reports that it has doubled for AWS in recent years.

So a slowdown, but AWS is still a very profitable and growing company. It currently has a 33% market share (according to statistics agency Statistica) in the gigantic cloud services market. Moreover, the subsidiary AWS is doing even better in terms of growth than Amazon itself. The tech giant reported third-quarter revenue of $127.1 billion, a year-over-year growth of 15%.