Amazon AMZN is making strong efforts toward capitalizing on the growing demand for Machine Learning (ML)-based cloud services.
This is evident from its latest move, wherein its cloud computing arm Amazon Web Services (“AWS”) introduced five machine-learning services namely Amazon Monitron, Amazon Lookout for Equipment, AWS Panorama Appliance, AWS Panorama SDK and Amazon Lookout for Vision.
All the services feature sensor analysis and computer vision capabilities along with advanced ML skills, which deliver quality control, security, operational efficiency and workplace safety to customers.
Further, these services help to eradicate difficulties and complications involved in the process of building a system for automating and augmenting across business operations.
We note that the new services are industrial and manufacturing customer-centric, which are expected to aid AWS in gaining strong traction among them.
This, in turn, will contribute to the topline of AWS, which has become an integral part of Amazon.
In the last reported quarter, AWS generated $11.6 billion of revenues (12.1% of total revenues), which went up 29% year over year. Continued solid performance of AWS has been benefiting the financial performance of Amazon.
This has been instilling investors’ optimism in the stock.
Coming to the price performance, Amazon has returned 73.3% on a year-to-date basis, outperforming the industry’s rally of 61.8%.
More Into the New ML Services
Amazon Monitron, which features sensors, gateway and ML service, helps in identifying abnormal equipment conditions by offering end-to-end machine-monitoring solution.
Amazon Lookout for Equipment also helps in detecting abnormal equipment behavior by allowing customers to utilize AWS ML models. Further, the service gives predictive maintenance.
AWS Panorama Appliance aids in improvising quality control process and boost workplace safety in the industrial facilities by enabling customers to use computer vision via existing cameras.
AWS Panorama SDK embeds computer vision capabilities in new cameras. This is likely to drive AWS’s momentum across industrial camera manufacturers.
Amazon Lookout for Vision helps in finding anomalies and flaws in products with the aid of AWS-trained computer vision models.
We believe all the five new ML servicesposition the company well to reap benefits from the booming Machine Learning as a Service market (MLaaS), which is riding on the growing proliferation of cloud-based technologies.
Per a report from Mordor Intelligence, the global MLaaS market is expected to witness a CAGR of 43% between 2020 and 2025, and reach $8.48 billion by 2025.
Further, growing ML initiatives of Amazon holds promise in the near future as well as in the long haul.
Intensifying Cloud Competition
Growth opportunities in the MLaaS market are alluring enough to encourageother cloud service providers to make advances as well.
Apart from Amazon, Microsoft’s MSFT Azure and Alphabet’s GOOGL Google Cloud are leaving no stone unturned to bolster presence in this potential market. Like Amazon Machine Learning, Azure Machine Learning and Google Cloud AI also offer MLaaS services to customers.
Meanwhile, International Business Machines IBM is also putting strong efforts to strengthen its cloud-based ML service offerings.
Nevertheless, the expanding ML-based cloud services portfolio of Amazon is likely to continue aiding its momentum in the promising ML market. Also, it is anticipated to aid Amazon’s dominance in the global cloud computing 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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