Amazon Web Services says it's making a big hiring push for sales and marketing as its growth continues to slow
Amazon Web Services says it's making a big hiring push for sales and marketing as its growth continues to slow
Amazon Web Services is hiring more sales and marketing people, as the dominant cloud-computing business fends off challengers including Microsoft, the company disclosed Thursday.
Amazon overall added nearly 100,000 employees in the third quarter alone, growing its workforce to 750,000 people. Brian Olsavsky, Amazon's chief financial officer, told investors during a call after Amazon reported third-quarter earnings that the biggest driver of the hiring was adding people for fulfillment and transportation roles during a push by Amazon to expand one-day shipping. Amazon expects the move to cost $1.5 billion in the next quarter.
Olsavsky, however, separately identified AWS sales and marketing as a major hiring priority for the company in the year to come.
"We are investing a lot more this year in salesforce and marketing personnel mainly to handle a wider group of customers, an increasingly wide group of products — we continue to add thousands of products and features a year — and we continue to expand geographically," Olsavsky said of AWS.
Amazon Web Services started primarily selling to startups. Microsoft, meanwhile, has a long history of selling to large enterprise companies. Investing in enterprise sales and marketing people, as Olsavsky said Amazon was doing, could help the company maintain its dominance over Microsoft and others.
Amazon's new sales and marketing hires are "especially for the enterprise market," Olsavsky said.
Amazon Web Services declined to disclose how many of Amazon's 750,000 employees worked in AWS. For a ballpark figure, more than 45,000 LinkedIn users list AWS as their employer, though those profiles aren't always accurate.
Amazon on Thursday reported earnings of $4.23 a share on revenue of $70 billion. Profit was less than Wall Street expected, sending Amazon stock down as much as 8.62% after-hours immediately following the release. Amazon stock had closed up 1% to about $1,780 a share in regular trading Thursday.
AWS is a big driver of profit for Amazon. AWS revenue reached $9 billion in the third quarter. AWS was responsible for nearly 72% of Amazon's nearly $3.2 billion in operating income in the third quarter.
But AWS' revenue growth continued to slow in the third quarter, dropping to 35% from 37% last quarter, continuing a pattern.
The analyst Patrick Moorhead of Moor Insights & Strategy, however, said the percentage points didn't tell the whole story for AWS. Last year, AWS pulled in $6.7 billion in revenue in the third quarter — meaning it grew by $2.3 billion in 12 short months.
That $2.3 billion figure is larger than most cloud companies' revenue, Moorhead said. He chalked the declining revenue growth up to the "law of large numbers," which holds that it's simply harder to maintain large growth figures when the base is already so impressive.
Amazon doesn't seem to be alone in facing that particular problem.
When Microsoft announced its own quarterly earnings release earlier this week, the company said revenue growth of its Microsoft Azure cloud platform slowed to 59% from 64% last year.
Experts seemed mostly similarly unfazed by that drop and said Microsoft's Azure cloud business had an opportunity to close the gap with AWS with more customers seeking a hybrid cloud, which is basically a mix of on-premises and public-cloud resources
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