AWS Operating Profit Increased 57% In Q1 2022

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Hello and welcome to Protocol Enterprise! Today: AWS continues to chug along, Intel continues to struggle, and this week’s enterprise tech moves.

Spin up

Fewer companies have embraced the tech industry’s “follow the data” mindset than you might think. According to new research from Snowflake, only 38% of respondents said they use data to inform “most or all decisions” made by their businesses.

Margin opportunities

So much for a price war: AWS’ first-quarter financial results were so profitable they once again propped up the entire Amazon conglomerate.

AWS operating profit soared 57% in the first quarter of the year to $6.5 billion, almost a billion dollars more than Wall Street was expecting the division to produce, according to CNBC.

It’s rare to see a discrepancy that large between expected and actual results, and could suggest that AWS is successfully encouraging more customers to embrace its higher-level managed services, which are pricier than its basic compute and storage services.
AWS’ operating margin is now 35.3%, compared to 29.8% for the fourth quarter of 2021 and 31% a year ago.
Should this trend continue, it might be time for some AWS employees to have frank conversations about compensation with their bosses: AWS (and Amazon in general) is well known for paying a little less than the (still quite high) market rate for top cloud tech talent.

First-quarter revenue increased 37% to $18.4 billion, behind the growth curve set during the fourth quarter of 2021 but ahead of the same period a year ago.

Microsoft and Google are once again growing faster than AWS, but on smaller numbers.
Microsoft famously refuses to disclose Azure revenue, but some back-of-the-envelope math based on Canalys market-share estimates suggests it’s around $11.7 billion.
Google also doesn’t report a specific figure for its Google Cloud Platform infrastructure business, but Canalys estimates suggest that figure to be around $4.5 billion.

It’s probably dangerous to say that cloud infrastructure computing is unlikely to be affected by broader economic worries centered around inflation and Russia’s invasion of Ukraine, but there certainly weren’t any signs of worry in the first quarter, now that the Big Three have all shared their numbers.

— Tom Krazit (email | twitter)

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Intel’s cloud problem

Keeping Wall Street happy these days isn’t an easy task for Intel. Despite growing its first-quarter data center segment sales 22% to $6 billion, investors were still displeased. According to MarketWatch, analysts had forecast data center revenue of $6.78 billion, and shares fell more than 4% in Thursday’s after-hours trading session.

Intel’s data center and AI business is critical to the company’s future. AI and other compute-intensive tasks done in the cloud rely on the processors built by Intel — and, increasingly, its rivals — and cloud providers are buying as many chips as they can get. But the server processors are also among the most lucrative of the array of chips Intel makes, and that profit helps fund Intel’s manufacturing expansion effort.

Overall, Intel reported a net profit of $8.1 billion on revenue of $18.4 billion, which was ahead of Wall Street expectations but overshadowed by weaker-than-expected guidance for the upcoming quarter. It projected net capital spending of $27 billion for the year.

— Max A. Cherney (email | twitter)

Enterprise moves

Over the past week, UiPath added a co-CEO; LogicMonitor poached leadership from Salesforce; and Twilio added new C-suite execs. Here’s what else is happening with the people of enterprise tech at the Pentagon, Intel, HashiCorp and more.

Robert Enslin is now co-CEO of UiPath. Enslin was formerly president at Google Cloud and will start with UiPath May 16.

Reeny Sondhi is Twilio’s first chief digital officer. Sondhi was previously chief security officer for Autodesk and worked for Dell EMC in security prior to that.

Amy Holcroft is Twilio’s first chief privacy officer. Holcroft was previously chief privacy officer for Hewlett Packard Enterprise and was global privacy counsel at HP.

Craig Martell is now the Pentagon’s chief digital and AI officer. Martell previously led machine learning for Lyft, and held ML and AI roles at Dropbox and LinkedIn.

Arun Gupta joined Intel as VP of Open Ecosystem. Gupta was formerly the head of the open-source program office and cloud native engineering at Apple.

Gurpreet Singh joined HashiCorp as SVP of Networking. Singh previously held leadership roles at Google, Pavilion and Pure Storage.

Rajeev Rajan is joining Atlassian as CTO. Rajan is currently a VP of Engineering for Facebook app and video, and was a corporate vice president at Microsoft.

Alyene Schneidewind joined LogicMonitor as chief performance officer. Schneidewind was formerly CRO of Salesforce Anywhere and Strategic Partnerships.

Julie Solliday joined LogicMonitor as chief customer officer. Solliday was previously SVP of Customer Success for Salesforce.

— Aisha Counts (email | twitter)