Amazon.com, Inc. (NASDAQ:AMZN) is the leading player in the Cloud business. Amazon Web Services are regarded as the cornerstone of the modern Cloud computing business, which is now touching its peak and a plethora of major players like Google, IBM and Microsoft are launching products and services to compete. Strangely, Amazon.com, Inc. (NASDAQ:AMZN) never revealed the exact figures and data about its Cloud business, but it says it will break-down its Cloud business in the upcoming quarterly report. But Citi group has issued a report which tells important facts about Amazon.com, Inc. (NASDAQ:AMZN)’s Cloud business. Amazon.com, Inc. (NASDAQ:AMZN) Web services business is growing in revenues. It got $4.5 billion in revenue last year; the revenues will touch $6.6 billion this year and grow even more by the next year. But the report says that the margins are bad for Amazon.com, Inc. (NASDAQ:AMZN) and that is the reason why its profits will not be as expected. The report says that Amazon.com, Inc. (NASDAQ:AMZN) will earn on $69 million by the end of 2016.
Citi used the data from various sources including Amazon.com, Inc. (NASDAQ:AMZN)’s previous reports, its investors calls, its competitors reports. The source believes that the main reason for behind the dwindling margin is massive cost-cutting by Amazon.com, Inc. (NASDAQ:AMZN) in its public and private Cloud offerings.
Amazon.com, Inc. (NASDAQ:AMZN) is also increasing its investments in the contemporary Enterprise which couples with the reduced costs to pose an overall detrimental effect on the company’s profits.
Ken Fisher’s Fisher Asset Management owns over 2.4 million shares in Amazon.com, Inc. (NASDAQ:AMZN).
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