Amazon Web Services holding profitability bag for Amazon

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(FILES)Jeff Bezos, CEO of Amazon, during a press conference in this September 6, 2012 file photo in Santa Monica, California. Want that Amazon order in just 30 minutes? Company CEO Jeff Bezos says he hopes to soon deploy an armada of mini-drones able to drop small packages at your doorstep. The US online retail giant's revolutionary project still needs extra safety testing and federal approval, but Bezos believes that Amazon "Prime Air" would be up and running within four to five years. "These are effectively drones but there's no reason that they can't be used as delivery vehicles," Bezos told CBS television's "60 Minutes" program late December 1, 2013. "I know this looks like science fiction. It's not," he said. AFP PHOTO/JOE KLAMARJOE KLAMAR/AFP/Getty Images
  • AWS is currently the highest net income earner for Amazon and continues to deliver double-digit net income.
  • Over the past three years, it has shown tremendous growth and profitability, and has been a support unit for Amazon’s overall profitability.
  • AWS is now a market share leader in the Cloud Infrastructure-as-a-Service segment, and experts say it will continue to dominate the space.

As a technology-based retail company, IT infrastructure could have easily become one of Amazon’s (NASDAQ:AMZN) biggest cost items, but Amazon deftly worked around it and converted a cost center to a profit-making business that is growing at such a speed that it is already making its presence felt in the company’s bottom line.

Amazon Web Services is the most profitable segment for the company, having brought in $1.86 billion in operating profits in 2015 at an eye-popping double-digit margin.

To put that in perspective, Amazon’s North America segment earned nearly eight times that for an additional operating profit of only $1 billion – a total of $2.75 billion.

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