. And many of them are being more cautious about their cloud costs, leading to a slowdown in one of Amazon's profitable businesses. The tech giant’s first quarter earnings report showed its cloud unit generated $21.4 billion and was growing at 16% in the first three months of this year — much slower than the 37% growth rate a year prior.
AWS is the market leader in the cloud arena, and its customers include some of the world’s biggest businesses and organizations, such as Netflix, Coca-Cola and government agencies. But Amazon executives have said the unit is facing short-term headwinds as companies look for ways to save money by reallocating their spending or cutting back on features they don’t need.
Google and Microsoft, which offer competing cloud businesses, posted strong showings in their respective businesses during the most recent quarter, but they’ve also seen some slowdown in recent months. Still, it’s easier for them to keep growing compared to Amazon, which can face more hurdles since it’s already a market leader and has to grow a larger customer base, said Sid Nag, an analyst at the information-technology research and consulting firm Gartner.