Amazon

’s

AMZN

cloud-computing arm, Amazon Web Services (“AWS”), made its new service AWS Mainframe Modernization generally available.

The service enables customers to modernize and run their mainframe workloads on AWS by offering them a complete development and runtime environment, and integrating required tools.

It helps automate capacity provisioning, security, load balancing, auto-scaling and application health monitoring by providing a managed, cloud-based environment for the modernized applications.

The service enables customers to refactor their mainframe workloads by transforming mainframe-based applications into modern cloud services.

AWS Mainframe Modernization allows customers to keep their applications as written and re-platform their workloads to AWS.

We note that the latest move by AWS has strengthened its portfolio offerings, which have been acting as the key catalysts to shaping its growth trajectory.

Strengthening Customer Base

We believe that the latest move will help AWS gain strong momentum among customers in this data-driven world.

Customers like TCS, Infosys and CGI have already started using AWS Mainframe Modernization.

We believe that the growing customer momentum will continue to drive AWS’s top line. Strengthening clientele will continue to aid its dominance and competitive edge against its peers like

Microsoft


MSFT

and

Alphabet

’s

GOOGL

Google.

Apart from the customer interest in the new service, AWS was picked by

Boeing


BA

as the strategic cloud provider.

In a bid to bring advancement in aerospace design and manufacturing, Boeing will migrate its applications from on-premise data centers to AWS. Further, Boeing will leverage AWS’s scalable, robust, and high-performing infrastructure and cloud services, including high-performance computing.

We believe that the expanding customer base will continue to drive AWS’s top line. In first-quarter 2022, AWS generated revenues of $18.4 billion (16% of Amazon’s net sales), which rose 37% year over year.

Competitive Scenario

The growing customer momentum on the back of solid portfolio strength is expected to continue aiding AWS’s market position.

Per the latest Canalys report, AWS accounted for 33% of the global cloud spending in first-quarter 2022, sustaining its leading position in the booming cloud market.

Microsoft’s Azure, the second-largest cloud-service provider, accounted for 21% of the worldwide cloud spending. Alphabet’s Google Cloud represented 8% of the cloud spending, marking itself the third-largest cloud provider.

However, Amazon, presently carrying a Zacks Rank #5 (Strong Sell), is facing stiff competition from Microsoft and Alphabet as both are targeting a bigger slice of the market on the back of their advancing cloud portfolios, which are bumping up their cloud revenues.

You can see


the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here


.

This poses a serious threat to Amazon’s dominant position in the cloud market. This, in turn, is making investors bearish about the stock, which has lost 27.4% on a year-to-date basis.

Notaby, Alphabet generated $5.8 billion of revenues from Google Cloud in first-quarter 2022, up 43.8% year over year.

Microsoft’s cloud revenues were $23.4 billion in first-quarter fiscal 2022, up 32% year over year.

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