M&E Connections

Big Customers, Managed Blockchain Among AWS Q4 Highlights

Amazon was helped in its fourth quarter (ended Dec. 31) by continued strong momentum in its Amazon Web Services (AWS) business, according to CFO Brian Olsavsky.

“AWS maintained a very strong growth rate and continued to deliver for customers,” he said Jan. 31 on an earnings call, noting Amazon also “had a great re:Invent conference in the quarter,” in November.

At re:Invent, AWS announced two purpose-built database services: Amazon Timestream, a fast, scalable and fully managed time series database for the Internet of Things (IoT), industrial telematics, application monitoring and DevOps applications; and Amazon Quantum Ledger Database (QLDB), a highly scalable, immutable, and cryptographically verifiable ledger, Amazon noted.

Commenting on Amazon’s increased marketing expenses in Q4 compared to a year earlier ($4.9 billion vs. $3.4 billion), Olsavsky said on the call that included AWS, telling analysts: “That’s where a lot of our headcount investment is going. Headcount only grew 14% year-over-year, but the areas that were growing in that mix were things like technology teams, device areas, AWS — especially sales and marketing.”

In its earnings news release, Amazon pointed to several other AWS achievements in Q4, including the additions of several new enterprise customers, saying Ellie Mae, Korean Air, Santander’s Openbank and the NCAA’s Pac-12 conference were “going all-in on AWS,” while Intel’s Mobileye subsidiary and Guardian Life Insurance named AWS their preferred public cloud provider, Amgen indicated it would leverage AWS as its strategic infrastructure provider for the vast majority of its cloud infrastructure, and National Australia Bank announced it selected AWS as its long-term strategic cloud provider.

AWS also “continued to expand its infrastructure in 2018 to best serve customers,” it said, adding AWS “now provides 60 Availability Zones across 20 infrastructure regions globally, with another 12 Availability Zones and four regions in Bahrain, Hong Kong SAR, Italy, and South Africa all coming online by the first half of 2020.”

AWS also “added significant Amazon SageMaker capabilities, making it easier for customers to build, train, and run machine learning models,” Amazon said.

Those new capabilities included AWS Marketplace for Machine Learning, which includes more than “150 algorithms and models (with more coming every day) that can be deployed directly” to SageMaker, and Amazon SageMaker Neo, a deep learning model compiler that allows customers to train models once and run them anywhere with up to two times improvement in performance, Amazon said. AWS also placed reinforcement learning in the hands of all developers for the first time with the announcement of Amazon SageMaker RL, AWS DeepRacer and the AWS DeepRacer League, it noted.

AWS also introduced Amazon Managed Blockchain, a new service to help companies build applications where multiple parties can execute transactions “without the need for a trusted, central authority,” it said.

Amazon, meanwhile, declined to specify on the call how much it’s spending on Amazon Prime video offerings, saying only the amount has been increasing and is expected to “increase even further in 2019.”
Also on the video front, Amazon’s Internet Movie Database (IMDb) division recently announced the launch of IMDb Freedive, a free streaming video channel available in the U.S. on the IMDb website via PCs and all Amazon Fire TV devices. The ad-supported channel allows viewers to watch TV shows and Hollywood hit moves without buying a subscription, Amazon noted.

Among other Amazon highlights in Q4 that the company cited in its earnings announcement was the fact that it had the biggest holiday shopping season to date for Amazon devices, with consumers buying “millions more devices” than they did during the 2017 holiday shopping season. The new Echo Dot was the top- selling product on Amazon “globally, from any manufacturer, in any category this holiday season,” it said.

The company, meanwhile, introduced new smart home features for its Alexa virtual assistant that uses artificial intelligence (AI), it noted. For example, Alexa Guard helps invited Echo customers keep their homes safe through Smart Alerts, Away Lighting and voice control of security systems from Amazon’s Ring and ADT, Amazon said.

Customers can now choose from more than 28,000 Alexa-compatible smart home devices from more than 4,500 unique brands, according to Amazon. At the same time, the number of devices with Alexa built-in “more than doubled in 2018,” it said, adding: “There are now more than 150 different products available with Alexa built-in, from headphones and PCs to cars and smart home devices.” Device makers also announced more new Alexa products at CES in Las Vegas in January, including the Lenovo Smart Tab and new devices from brands including First Alert, Jabra, JBL, Kohler, LG and Razer, Amazon said.

More than 1 million customers requested an invitation for Echo Auto, the company’s first Alexa-powered Echo device for vehicles, and more than 12 automotive partners announced support for Alexa at CES, including Jensen, along with software and service providers including Media & Entertainment Services Alliance (MESA) member Luxoft and Qualcomm, Amazon said.

Alexa also continues to get smarter, Amazon boasted in its earnings release, saying the Alexa Skills Store “now offers more than 80,000 skills and Alexa customers can now access Apple Music’s library of 50 million songs on their Echo devices.”

Amazon also “made new scientific advancements with Alexa, including a new unsupervised self-learning system that detects the defects in Alexa’s understanding and automatically recovers from these errors, helping Alexa learn at a faster pace,” the company said, adding it also introduced a new text-to-speech system, which “uses a generative neural network and produces more natural speech, paving the way for Alexa and other services to adopt different speaking styles based on different contexts.”

Amazon recently announced it will host re:MARS, a new global AI conference on machine learning, automation, robotics and space, June 4-7 at the Aria Resort & Casino in Las Vegas.
The company’s total Q4 revenue grew to $72.4 billion from $60.5 billion a year earlier, while income increased to $3 billion ($6.04 a share) from $1.9 billion ($3.75 a share).