- In April 2015, Amazon had what technology analyst Ben Thompson called a second initial public offering. It disclosed for the first time the staggering profitability of Amazon Web Services, which started in 2006 as an experiment to rent out computing horsepower to companies that needed it. It proved to be a big idea that allowed young businesses to get off the ground more quickly and cheaply than before. Large companies, notably Netflix Inc., also started using AWS—first for side projects, then eventually to support essential operations.
Amazon had always been the clear market leader in this kind of cloud computing service, but few outside the company were prepared for just how valuable AWS had become. Inside Amazon was a division with the muscular profit margins of Starbucks Corp. and higher annual sales than the entire Chipotle Mexican Grill restaurant chain.
The AWS disclosure changed the way investors and stock watchers valued Amazon. Suddenly there was evidence the company could be consistently and nicely profitable if it chose that route. It was also among the biggest signs that Amazon’s head-scratching investments could pay off in a huge way. In 2015, AWS was responsible for two-thirds of total operating profit. Last year it was more than 100 percent.
AWS is awesome and if they are forced to break the company apart once we have a functioning government in the future, AWS is going to be its own mega corp.