In a bid to bolster presence in the blockchain industry, Amazon 's AMZN cloud computing division, Amazon Web Services ("AWS") is teaming up with ConsenSys' subsidiary Kaleido, a blockchain business cloud.
Kaleido is a Software-as-a-Service (SaaS) provider which features Ethereum packages - Geth and Quorum. This helps companies to manage and build blockchain platforms easily.
With this partnership, Kaleido will be available at AWS Marketplace and can be accessed across various AWS regions from anywhere in the world. Amazon aims to deliver distribute ledger technology to AWS customers which will help them to manage their blockchain projects at a higher speed.
This will improve Amazon's service offerings and boost the customer base of AWS. This will further drive the top line of the company.
Coming to price performance, shares of Amazon have returned 66.8% over a year, outperforming the industry
's rally of 47.8%.
Blockchain Holds Promise
Blockchain provides higher security to real time digital economic processes with the help of digital recording of data. It is an emerging technology in today's world.
Several big firms like Accenture, Deloitte, JP Morgan and HSBC are making efforts to bolster their presence in this industry.
Per the report from Markets and Markets, the global blockchain market is expected to reach $7.7 billion by 2022 from $411.5 million in 2017 by growing at a CAGR of 79.6% between 2017 and 2022.
We believe the latest move will help Amazon to gain from the growing popularity of blockchain in the market. Last month, AWS also unveiled out-of-the-box blockchain networks for the ethereum and Hyperledger Fabric protocols.
By entering the blockchain industry, Amazon will be able to improve its competitiveness against some tech giants like Microsoft MSFT , Facebook FB and IBM.
The partnership will provide an edge to AWS in strengthening its competitive position from Microsoft's Azure which has also introduced blockchain solutions. Moreover, Kaleido will become a strong competitor of Microsoft's enterprise blockchain - Coco Framework.
Apart from this, AWS and Azure are tough competitors where AWS enjoys a greater market share, courtesy of to its first mover advantage. Per the data from Synergy Research Group, share of AWS in cloud infrastructure market was 33% compared to 13% of Azure in the first quarter.
Additonally, AWS improves its competitive edge against IBM Cloud which also uses blockchain technology.
Further, Facebook has announced its plans to set up its own blockchain division in order to explore use cases of blockchain. Hence, Amazon becomes the new competitor of Facebook.
Amazon.com, Inc. Revenue (TTM)
Amazon.com, Inc. Revenue (TTM) | Amazon.com, Inc. Quote
AWS Gaining Traction
Amazon is gaining momentum with growing cloud business. AWS is gaining traction with its expanding clientele, courtesy of its continuous efforts to improve its offerings.
Recently, AWS acquired few clients within a couple of weeks. The latest being Verizon VZ , who will be shifting its business-critical applications and database backend systems to AWS. Moreover, Oath, a subsidiary of Verizon has also selected AWS as its preferred public cloud provider
Also, Ryanair selected AWS to which it will be moving its infrastructure. Production workloads of Ryanair Rooms and Ryanair.com are already being run on AWS.
Last month, Shutterfly also migrated its infrastructure to AWS. Additionally, companies like GoDaddy, Cox Automotive, NextGen Healthcare, Amway, LG Electronics selected AWS during the first quarter till when its customer base totaled 10K.
AWS is becoming popular due to its reliability and innovative services like AWS machine learning, Amazon SageMaker, Amazon Aurora, AWS Secrets Manager and many more.
With the latest move, AWS will continue to deliver outstanding performance in the long haul.
Currently, Amazon carries a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 (Strong Buy) Rank stocks here .
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