Analysts: AWS Cloud Business Worth $160B

Deutsche Bank estimated valuation for Amazon's cloud business alone equals to entire-company valuation for IBM

Nicole Henderson, Contributor

November 4, 2015

2 Min Read
Analysts: AWS Cloud Business Worth $160B
Werner Vogels, CTO, Amazon, speaking at AWS re:Invent 2015 in Las Vegas (Photo: AWS)



This article originally appeared at The WHIR

Analysts at Deutsche Bank believe Amazon Web Services could be worth $160 billion. On Tuesday Deutsche Bank analyst Karl Keirstead said in a note that with AWS cloud revenue forecasted to reach $16 billion by 2017, and based on a 10x multiple, it would get a valuation of $160 billion if it was a standalone business.

To put the number into perspective, IBM currently has a valuation of $160 billion,Oracle is at $170 billion, and Salesforce has a $50 million market cap. And those are whole companies.

A report earlier this year by analysts at financial firm Robert W. Baird pegged the value of AWS at between $40 and $50 billion prior to AWS reporting its earnings for the first time in April 2015. At the time, Amazon CEO Jeff Bezos said AWS was a $5 billion business.

Deutsche Bank came up with the 10x multiple by comparing it to AWS cloud peers in the enterprise space, according to a report by Business Insider. Salesforce,Workday and Google had a median 2016 revenue multiple of 9x.

The note said that AWS is about 6x larger than Microsoft Azure based on revenues and “is arguably the greatest disruptive force in the entire enterprise technology market today.” Microsoft recently announced its quarterly earnings with Azure revenue and compute usage doubling year over year.

The analyst note went on to commend AWS head Andy Jassy, who has kept “a relatively low profile.” It said that he may be “the world’s most under-appreciated technology company head.” Jassy was on stage at this year’s AWS re:Invent conference to deliver a keynote which unveiled a number of new services, including cloud-based business intelligence service Amazon QuickSight, physical data transfer service Amazon Snowball, and managed streaming service Amazon Kinesis Firehose.

In its most recent quarter AWS reported $2.1 billion in revenue, growing 78 percent year over year.

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About the Author(s)

Nicole Henderson

Contributor, IT Pro Today

Nicole Henderson covers daily cloud news and features online for ITPro Today. Prior to ITPro Today, she was editor at Talkin' Cloud (now Channel Futures) and the WHIR. She has a bachelor of journalism from Ryerson University in Toronto.

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