Amazon (NASDAQ: AMZN) recently reported AWS revenue growth of 12%, a far cry from its growth rates 2-3 years ago and its historic growth rates. In this post, we will walk through why we believe the short-term slowdown in the cloud computing industry is a positive indicator for future revenue growth and profitability for the cloud computing industry, especially Amazon but also Microsoft (NASDAQ: MSFT) and Alphabet (NASDAQ: GOOG).
Background
Amazon, one of Recurve’s portfolio companies, is the world's greatest modern infrastructure utility company. Its two main businesses, Stores and AWS, are plug-and-play platforms for companies selling physical goods and for companies running their IT applications and workloads. They radically reduce the upfront investment of human and financial capital to operate e-commerce businesses and/or to develop and deploy significant IT capabilities. They allow any business to scale from startup size to significant scale with all the shared benefits of redundancy, security, reliability, and lower costs.
Rather than establish their own logistics and distribution infrastructure, merchants can use Fulfilled by Amazon (FBA) to carry your goods and distribute them to your customers. Furthermore, Buy With Prime allows merchants to use FBA on their own domains, providing the back-end fulfillment, logistics, and reverse logistics services that unshackle merchants from operational complexities so that they can focus on the two things that differentiate them: product development and customer acquisition strategies.
Disclaimer
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