Amazon grew cloud sales by a billion dollars last quarter

Amazon's cloud business unit has celebrated a strong second quarter, with revenue of US$2.9 billion for the three months to 30 June, a rise of 58 percent – or more than US$1 billion year-on-year.

The result beat analyst estimates of US$2.83 billion and drove a 2 percent share price increase in after-hours trading.

"They crushed estimates," said Michael Pachter, analyst at Wedbush Securities, told Reuters.

Amazon Web Services is well on track to break through the symbolic $US10 billion annual revenue threshold, having reported US$5.4 billion for the six months.

The growth means AWS now represents 10 percent of the retailer's turnover. Another 58 percent comes from Amazon's North American business and 32 percent internationally.

AWS' profit also improved, with operating income of US$863 million and a margin of 29.9 percent in the most recent quarter – its strongest operating margin since Amazon began breaking out AWS' financial performance last year.

Microsoft Azure also goung strong

Rival cloud provider Microsoft released its fourth-quarter and full-year results today, which show strong growth for its AWS competitor. Azure doubled year-on-year in the three months to 30 June. Azure compute usage more than doubled year-over-year, the vendor reported.

Microsoft does not break out Azure revenue specifically, instead reporting a combined figure for server products and cloud services within its 'Intelligent Cloud' business unit, which generated revenue of US$6.7 billion for the quarter.

Server products and cloud services revenue grew US$253 million or 5 percent, which would put the server products and cloud services revenue at more than $5 billion. The growth was "driven by Azure revenue growth of 102 percent".

According to research firm Canalys, worldwide cloud infrastructure services expenditure grew 52.3 percent year-on-year in the quarter. Canalys valued the global cloud infrastructure services market at US$9.5 billion in the quarter.

"Amazon’s AWS remained the leading cloud infrastructure services provider, accounting for 30.4 percent of total spend. Its early mover advantage, aggressive pricing, broad geographic coverage and wide range of service offerings are key factors behind its success," reported Canalys.

"But it is under growing pressure from Microsoft Azure, Google Cloud Platform and IBM SoftLayer. Overall, these four providers represented 60.5 percent of total worldwide cloud infrastructure services spend."

Updated 5:30pm 29.7.2016: previous headline incorrectly stated AWS had sold US$1 billion of cloud in quarter