Amazon's cloud chief eyes acquisitions, expanding market lead

AMAZON.COM'S cloud chief Adam Selipsky said the e-commerce giant doesn't plan to spin off its profitable Amazon Web Services (AWS) division.

"We have no current plans to spin out" the cloud unit, Selipsky said Wednesday (Apr 20) in an interview on Bloomberg Television, addressing a question occasionally raised by analysts and journalists. "We think that our customers are very well served by having AWS be a part of Amazon."

AWS is the largest provider of rented computing power and other cloud infrastructure. The unit generated more than US$62 billion in revenue in 2021 and about 74 per cent of the company's US$24.9 billion in operating profit.

Selipsky, who rejoined AWS last year as founding chief executive officer Andy Jassy took on the top role at Amazon, said the cloud market is still in its early days. Just 5 to 15 per cent, depending on the estimate, of corporate technology spending, is dedicated to the cloud, he said.

Selipsky said AWS could maintain its lead in cloud infrastructure and services as the market grows if the company continues to move fast. "I think our segment share should absolutely be able to be maintained or even potentially increased, but that'll be a question of how well we can do our jobs," he said.

While AWS has historically sought small acquisitions, Selipsky said the unit is open to deals of all sizes. But tuck-in purchases are preferred because it's more difficult to integrate big corporate mergers in the technology industry, he said.

Asked about his view on the effort by Elon Musk to buy Twitter and talk that Amazon may be a suitor for the social network, Selipsky downplayed the idea.

"That I don't know. A big part of all of Amazon's businesses revolve around partners in our ecosystem," he said. "We're very close to many companies who have a strong social presence, be it AWS customers or in our retail business with customer acquisitions and messaging, doing more and more in the retail business with the shopping experience using social channels. So we're very intertwined with social media companies and I would imagine across all of our business, we'll continue to be closely intertwined." BLOOMBERG