Amazon.com, Inc.'s AMZN cloud services division, Amazon Web Services (AWS), is on track to become a dominant player in the industry.
Recently, the e-commerce giant announced that Matson, Inc. MATX, a big freight shipping company has moved all of its critical operations to Amazon Web Services.
So, Matson is now the latest to join the long list of AWS users that includes big names like Netflix, Expedia and Adobe Systems. The shipping service provider closed all its on-premise data centers, covering Alaska, Guam Hawaii, China and South Pacific regions, to migrate to AWS Cloud. This will help Matson achieve better performance as well as improved reliability, security, and cost savings in IT infrastructure.
Mike Clayville, AWS Vice President of Worldwide Sales, said “We’ve worked closely with Matson during its migration to AWS and are excited to congratulate them on the closing of their data centers.” He added that AWS, one of the broadest cloud computing platforms available, will allow the shipping carrier to put more of its resources and time to drive new, improved processes for its clients.
Shares of Amazon have been steadily treading higher on a year-to-date basis. The stock has returned 15.46% compared with the Zacks Electronic Commerce industry’s gain of 10.65%.
AWS is in the business of providing computing infrastructure like a utility so companies don’t need to maintain their own IT infrastructure. AWS provides tools that support website production, social media and mobile applications that have taken the company to the leadership position in the infrastructure as a service (IaaS) space.
Launched a decade ago, AWS has grown in popularity over the past few years. In the last reported third quarter, Amazon saw AWS revenues of $3.231 billion, up from $2.085 billion last year. This represents growth of nearly 55% year over year and nearly 12% sequentially.
However, the speed at which businesses are moving to the cloud and innovating in the space has intensified competition. This also puts pressure on Amazon’s resources.
Despite increasing competition, we remain positive about AWS' growth prospects. Amazon’s continuous efforts to launch new features, open more data centers globally and constantly lower prices will give it a competitive advantage. We remain optimistic about the functionality, partner ecosystem and the experience that AWS offers and believe this will lead to continued customer wins.
Currently, Amazon carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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