- Amazon hosted its Web Services Summit in San Francisco this week.
- A Jefferies analyst in attendance notes massive lines for technical talks, confirming the company’s clear lead in cloud computing.
- Track Amazon’s stock price in real-time here.
Amazon‘s $US17 billion Web Services business is already the clear leader when it comes to cloud computing, and the company’s AWS Summit this week only confirmed its dominance, Jefferies says.
“With 9K in attendance, we note this regional event has now reached the same scale as where re:Invent was less than five years ago,” analyst Brent Thill told clients of the event in San Francisco. “AWS remains the runaway leader in a vast, and still rapidly growing, cloud infrastructure market by a wide margin.”
Amazon brought in more than $US17 billion from AWS in 2017, regulatory filings show, and Jefferies says that could more than triple within the next half decade.
“AWS has become the gold standard for millions of customers,” Thill added. “We think this business can cross $US60Bn in annual revenue in five years (vs. $US20Bn run rate today), making it one of the largest enterprise software companies on the planet.”
It will also allow Amazon to expand from cloud infrastructure “up the stack” into the application layer, which includes things like software-as-a-service products. Jeffries says this market opportunity could be an estimated $US100 billion compared to infrastructure’s $US72 billion.
Amazon’s web business could get a boost soon as it closes in on a $US10 billion deal with the Pentagon, despite Trump’s string of tweets attacking the company, a source close to the deal told Business Insider.
Shares of Amazon are up 21% so far this year, and Jefferies estimates they could climb another 32% to $US1,850.