Amazon has been pretty adamant when it comes to the financials of its cloud infrastructure unit, Amazon Web Services: Not disclosing it because it’s not required to.
But that may soon be bound to change. According to a report by VentureBeat, Amazon may soon be forced to open up its books for AWS because of an SEC rule that requires companies to file separate reports for entities with revenue, profits, or assets over 10% of the entire company.
In other words, once AWS’ business grows large enough, Amazon will have no choice but to disclose its financials. And that may happen in just a couple of years.
The VentureBeat report cited an analysis by Pacific Crest Securities that projected AWS revenue to grow 58% this year to $US5 billion. Last year, AWS had $US3.1 billion in revenue and $US1.9 billion in the year before.
“AWS remains on a hyper growth trajectory despite the law of large numbers and remains on pace to essentially double revenue every two years,” the research note said.
At this rate, AWS will surpass $US10 billion in sales within the next two years. Amazon as a whole had $US74.4 billion in revenue last year.
AWS SVP Andy Jassy believes breaking its numbers would put AWS at a huge disadvantage. “I think in really fast-growing, nascent markets, like the cloud is, there’s a lot of competitive intelligence when the leader gives out those types of metrics — so, as long as we don’t have to, we don’t disclose it,” he said at the Fortune Brainstorm Tech conference last week.
But Jassy and the crew at AWS should feel pretty good about themselves, if AWS does grow fast enough to take 10% of Amazon’s overall business. As the Pacific Crest report says, AWS’ growth trajectory is on pace to surpass Microsoft, Oracle, Salesforce, VMware, and Yahoo.
“This places AWS into a unique camp of some of the most valuable internet and software franchises that exists today,” it said.
Disclosure: Jeff Bezos is an investor in Business Insider through his personal investment company Bezos Expeditions.