Amazon’s AMZN strong efforts toward strengthening cloud compute offerings are testament to its customer-oriented focus. In fact, the company is making every effort to expand presence in the cloud market on the back of robust product and services portfolio of Amazon Web Services (AWS).
The move to make its three new sixth generation Amazon Elastic Compute Cloud (Amazon EC2) instances namely general purpose (M6g), compute-optimized (C6g) and memory-optimized (R6g) generally available is evidence of the same. This move expands AWS’ instances offerings.
Notably, the new instances are based on the Arm-based Graviton2 processors, which on comparison with x86-based instances are capable of offering 40% better price and performance to customers.
Moreover, in comparison with A1 instances, these instances offer up to seven times more performance, four times more compute cores and five times faster memory.
AWS Gaining Further Momentum
Amazon is likely to gather further steam among customers on the heels of the latest move. The advanced capabilities inbuilt in the new instances are suitable for diverse workloads that call for large instance sizes, high memory capacity, increased networking bandwidth and fast processing.
Notably, M6g,which is applicable for general-purpose workloads such as application servers, mid-size databases, microservices, and caching fleets, is likely to witness strong adoption. It has already gained traction among a number of customers including Netflix, Nielsen, Honeycomb.io, Hotelbeds and LexisNexis.
Further, C6g is applicable for compute-intensive workloads such as high performance computing, video encoding, gaming, scientific modeling, distributed analytics and CPU-based machine learning inference among others.
Additionally, workloads like open source databases (MySQL, MariaDB, and PostgreSQL), real-time big data analytics and in-memory caches (Redis, Memcached, and KeyDB) can be run efficiently by leveraging R6g instances.
We believe AWS with M6g, C6g and R6g instances that are based on AWS Nitro System and supported by popular open source operating system distributions are expected to gain strong momentum across the demanding workloads.
Along with the abovementioned customers, Datadog and CrowdStrike have also shown interest in the new instances.
Amazon.com, Inc. Revenue (TTM)
Amazon.com, Inc. revenue-ttm | Amazon.com, Inc. Quote
Amazon to Benefit
Strengthening customer momentum is likely to contribute to AWS sales in the near term. This, in turn, will drive Amazon’s top line. Notably, Amazon is benefiting from strengthening AWS services. In first-quarter 2020, AWS generated $$10.2 billion sales, accounting for 14% of Amazon’s net sales.
The company’s constant efforts toward strengthening cloud services portfolio in this data-driven world holds promise.
Additionally, expanding clientele is likely to continue providing AWS a competitive edge against Microsoft’s MSFT Azure, Alphabet’s GOOGL Google Cloud and International Business Machines’ IBM cloud division, IBM Cloud.
Further, it will aid AWS’ dominant position in the global cloud market.
Per the latest Synergy Research Group report, Microsoft and Google acquired worldwide cloud market share of 18% and 8% in the first-quarter 2020, respectively, while Amazon led with 32% share of the market.
Currently, Amazon carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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