How Amazon’s Cloud Numbers Stack Up Against Its Competitors’

If it keeps growing at the rate it has from this time last year, Amazon Web Services will finish 2015 with a business approaching $7 billion in revenue. And if it hits the $102 billion in overall revenue that analysts expect, that will make AWS account for about 7 percent of sales overall.

By revenue it is the biggest cloud, though it’s a matter of ensuring you’re comparing directly to the kind of cloud that Amazon runs. More than a million customers fire up machines in Amazon’s data centers every day, replacing servers they might otherwise have to buy. Some are used for basic data storage, some are used for more complex applications. When cloud business analysts start drawing lines around different companies that run cloud operations, they tend to classify AWS as infrastructure-as-a-service.

Compare that to IBM, for example, which likes to boast of its $7.7 billion cloud business (2014 revenues), but that includes its business of selling cloud-based applications or software-as-a-service, something Amazon doesn’t offer. The part of Big Blue’s cloud business that is most directly comparable to AWS is the “as a service” portion, which is made up mostly of its SoftLayer unit. It posted revenue of about $3.8 billion.

It’s a similar case for Microsoft, which today disclosed that its cloud business is on a run rate to deliver $6.3 billion in revenue this year, but that includes applications too, including Office 365 and Dynamics. The size of its infrastructure portion isn’t known.

Then there’s Google, which still reports its cloud operations in much the same way that Amazon used to: In an “other” category that includes everything that’s not advertising. That’s on a run rate to about $7 billion, but its impossible to know how much of that comes from the Google Cloud.

AWS is also profitable, turning in an operating margin just below 17 percent. Neither IBM, Microsoft or Google disclose this figure around their cloud operations. But there’s another company that, although smaller, can provide some comparison: The cloud and Web hosting outfit Rackspace. Rackspace posted nearly $1.8 billion in revenue and a $163 million net profit, giving it an operating profit of about 9 percent.

Operating profits are better than losses, which a lot of analysts expected for the AWS unit. So it makes sense that Amazon has been investing aggressively to grow it. This investment shows up in the “property and equipment” section that’s on the last two pages of Amazon’s press release.

Of the $17 billion worth of property and equipment on Amazon’s books as of the end of 2014, more than one-third of it — over $6 billion worth — was devoted to AWS. And that figure rose 86 percent year-on-year.

Here’s why: AWS as a computing entity is utterly massive. As of the end of last year it had about 1.4 million servers in operation serving more than 1 million customers. (Incidentally, that works out to revenue of about $3,317 per server during 2014.) Those servers were split up among 28 of what Amazon calls “availability zones,” including one launched in Germany last year. That investment you see is Amazon building a bigger cloud. It’s clearly not done yet.

This article originally appeared on Recode.net.