Andy Jassy, CEO of Amazon Web Services, addresses the Audience in AWS re:Invent 2017.
(GeekWire Photo / Tom Krazit) For the very first time this week, Amazon disclosed how much revenue Amazon Web Services will eventually realize from multiyear cloud contracts, and providing a slightly clearer picture of the way companies are paying to the cloud. Amazon’s quarterly filing with the SEC demonstrated that it will eventually recognize $12.4 billion “mostly related to AWS” over the next few decades as it works its way through contracts that initially established a relationship lasting longer than annually. It’s not exactly clear what “mostly” way, but it’s safe to assume that a large chunk of the revenue was driven by Amazon’s most profitable branch. The business also disclosed that the weighted average remaining life on those contracts is 3.2 decades. (GeekWire Chart) It’s not especially surprising that AWS is chasing multiyear contracts as it develops into the strongest enterprise technology provider to emerge in the cloud computing era. Sure, AWS climbed to prominence on the costs of startups, however some of those startups now are pretty large companies with the assurance to sign new multiyear deals, and more and more enterprise clients are signing deals with the business. There are also plenty of reasons why it makes sense to lock a cloud deal for a number of decades. Simply moving workloads to the cloud may be multiyear process itself; it required Netflix seven decades to proceed “all-in” on AWS, it said in 2016. It’s also simpler to negotiate discounts if you are willing to give a vendor several years of your company. During 2017, AWS listed $17.5 billion in revenue.