Revenue for the third quarter of 2022 marks AWS’ slowest expansion in the last few quarters. Credit: IDG Macroeconomic conditions led by the pandemic and the geopolitical crisis in Ukraine have further slowed down growth of Amazon’s cloud computing unit, Amazon Web Services (AWS), in the third quarter of 2022. Amazon on Thursday said AWS had raked in revenue of $20.5 billion for the quarter ended September 30, up 27.5% year-on-year. However, revenue for AWS grew at 33% year-on-year at 19.74 billion in the previous quarter (ended June 30). For the quarter before that, revenue grew 36.5%. The steady decline in growth can be attributed to macroeconomic conditions, due to which the company is seeing a slowdown in customer expenditure, company executives said during an earnings call. “We do see some of the consumers are cutting their budgets and trying to save money in the short run. I would say that although we had a 28% growth rate for the quarter for AWS, the back end of the quarter, we were more in the mid-20% growth rate. So, we’ve carried that forecast through to the fourth quarter,” CFO Brian Olsavsky said, according to a Motley Fool transcript. Other factors affecting AWS growth, according to Olsavsky, were inflation in employee salaries due to stock-based compensation and rising energy costs alongside continued investments in its data centers. “We’re also seeing energy costs that are materially higher than they had in pre-pandemic, electricity and the impact of natural gas pricing. So, we’re fighting through some of that as well, which is a new thing for the AWS business. But we’ll continue to look for ways to optimize our operations to use less energy,” the CFO said during the earnings call. AWS to work with customers to lower their costs To continue its revenue momentum, AWS said it was working closely with customers to lower their costs. “When I talk about enterprise customers in AWS, yes, we’ve been working with customers to lower their bills. Just like all companies, they want to lower their spend when they’re faced with uncertainty in the market,” Olsavsky said while responding to a question on customer behavior. During the quarter, rivals Microsoft and Google have increased their cloud revenue by 35% and 38% respectively. AWS, which still leads the infrastructure-as-a-service (IassS) market, also has been gradually losing ground to these rivals, according to a report from market research firm Gartner. At the end of 2021, AWS retained 38.9% share of the market against 40.8% dominance in 2020, Gartner said. Microsoft increased its market share by 1.4% market share to 21.1%, the report showed. Google gained a percentage point, for a 7.1% share of the market. Related content brandpost Sponsored by Huawei A Glance at the Intelligent Network Plans from Huawei Analyst Summit 2024 By Chris Barnard May 22, 2024 4 mins Digital Transformation Networking news PagerDuty seeks to ease incident response with generative AI The IR SaaS company has enhanced its PagerDuty Copilot to provide natural-language post-incident reviews, among other automation, summarization, and analysis features. By Evan Schuman May 22, 2024 4 mins Incident Response Generative AI Enterprise Applications how-to Download our enterprise architecture (EA) tools buyer’s guide From the editors of CIO, this enterprise buyer’s guide helps CIOs and other IT leaders understand what enterprise architecture (EA) can do for them and the kinds of tools available to do EA well. By Sarah K. White and Peter Wayner May 22, 2024 1 min Enterprise Architecture Development Tools Enterprise Buyer’s Guides news Big tech companies commit to new safety practices for AI The Frontier AI Safety Commitments can provide a guide not only for AI model developers but also for CIOs to better understand the risks associated with deploying the technology. By Elizabeth Montalbano May 22, 2024 4 mins Regulation IT Governance Frameworks Generative AI PODCASTS VIDEOS RESOURCES EVENTS SUBSCRIBE TO OUR NEWSLETTER From our editors straight to your inbox Get started by entering your email address below. Please enter a valid email address Subscribe