GigaOM’s own Barb Darrow points out what many of us suspected, that Amazon’s cloud is bigger, and more profitable than we think. Check this out:
In a new report, Macquarie estimates that the overall cloud market will hit $71 billion in 2015, and pegged AWS’ addressable part of that market at $38 billion. These are bigger than Gartner’s previous estimates of $56 billion for the overall cloud market size and $28 billion for AWS’ portion of that market. Thus, AWS could now be worth $19 billion as a standalone entity, based on a 5X multiple.
In other words, if they took AWS out into the open markets, the value of the business could be about $20 billion, give or take a billion. That’s about what most analysts in the cloud computing world have been thinking.
Perhaps a spinout and an IPO is in the works? It would be huge.
The reality is that AWS could be worth more than the retail portion of Amazon at some point, which is now at $121 Billion. The businesses are vastly different, thus it makes sense to separate them. It could be good for AWS employees, customers, and potential investors. Also, it could provide a key metric for the market.
I suspect that we’ll see something happen here. The structure of the AWS business does not make sense long term, and it’s time to make some plays on the success of the company.