Amazon's cloud was a $25.65 billion business in 2018, and shows no signs of slowing down (AMZN)

Jeff Bezos laughing

On Thursday, Amazon announced that its cloud business, Amazon Web Services, generated $7.43 billion in net sales this past quarter, and $25.65 billion in all of 2018.
AWS generated $2.2 billion in operating income last quarter, too — accounting for two-thirds of Amazon's entire operating income for the period.
The number two cloud player Microsoft doesn't break out specific revenue for Microsoft Azure, its rival to AWS. But it seems like Microsoft is still playing catch-up to Amazon.

Amazon beat Wall Street estimates for its most recent quarter, thanks in large part to its colossal cloud growth.

During the quarter ended in December, Amazon Web Services generated $7.43 billion in net sales, jumping 45% from the same period of 2017. It posted $2.2 billion in operating income — accounting for more than two-thirds of the entire company's total operating income, and 61% higher than this time last year.

For all of 2018, AWS made $25.65 billion in sales, the company reported.

AWS is considered the number one player in the cloud wars, with a more fully-featured offering and more government certifications than most, if not all, of its rivals. Experts say Microsoft is catching up with its Microsoft Azure platform, but Amazon still eats up the lion's share of the market.

In comparison, Microsoft reported earlier this week that its Intelligent Cloud unit generated $9.38 billion of revenue in the same quarter. However, while Intelligent Cloud revenue includes Microsoft Azure, it also includes other cloud and server products as well — and Microsoft doesn't disclose specific revenue figures for Azure. This makes it impossible to directly compare Microsoft's cloud with Amazon's, but suggests that AWS is still ahead of the game.

Indeed, at an Amazon conference in November, AWS CEO Andy Jassy suggested that his company has 51.8% of cloud market share. In comparison, he estimated that Microsoft has 13.3% of the market, Alibaba has 4.6%, and Google has 3.3%.

Product-wise, Amazon has been moving fast as well: In the last quarter, AWS announced a hybrid cloud offering called AWS Outposts, and added significant artificial intelligence capabilities.

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