Amazon Unbound: Jeff Bezos and the Invention of a Global Empire

by Brad Stone

Nevertheless, that January, Amazon signaled that it would report AWS’s financial results in its quarterly report for the first time, and investors girded in anticipation. Many analysts predicted that AWS would be revealed as just another Amazon “science project”—a lousy, low-margin business that was sapping energy from the company’s more advanced efforts in retail. In reality, the opposite was true. That year, AWS had a 70 percent growth rate and 19.2 percent operating margin, compared to the North American retail group’s 25 percent growth rate and 2.2 percent operating margin. AWS was gushing cash, even as it rapidly consumed most of it to build even more computing capacity and keep up with the fast-growing internet companies like Snapchat that were piling onto its servers. This reporting was a huge surprise for the analysts and investors who monitored and scrutinized Amazon, and likely even a bigger one for Microsoft, Google, and the rest of the enterprise computing world. Analyst Ben Thompson facetiously called that April 2015 earnings report “one of the technology industry’s biggest and most important IPOs.” After the reveal, Amazon’s valuation jumped almost 15 percent in a day, crossing the $200 billion mark for the first time and laying to rest the myth of Amazon as a perpetually money-losing machine.