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Amazon Web Services Establishes Dedicated Aerospace And Satellite Solutions

Shivdeep Dhaliwal
·2-min read

Amazon Inc’s (NASDAQ: AMZN) cloud-computing arm, Amazon Web Services (AWS), is establishing a specialized Aerospace and Satellite Solutions segment to better compete with rivals.

What Happened

As the U.S. pursues dominance in space over China and Russia, the Congress is allocating billions of dollars towards the development of new technologies such as boosters and missiles, reported the Wall Street Journal.

AWS is planning to benefit from the increase in spendings by both military and civilian organizations such as Lockheed Martin Corporation (NYSE: LMT), NASA, and the Pentagon.

According to the WSJ, the company will announce a dedicated unit called Aerospace and Satellite Solutions to focus on business with the public sector. Air Force Maj. Gen. Clinton Crosier will run this new segment.

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Crosier was formerly in charge of establishing the newly formed Space Force, a branch of the military.

Why It Matters

AWS’s public sector business is under pressure from competitors. The company recently lost out to Microsoft Corporation (NASDAQ: MSFT) in the provision of cloud computing to the Pentagon, the program is estimated to be worth $10 billion.

The Central Intelligence Agency’s multi-year deal with AWS is also nearing the end as the agency looks for improvements, noted the WSJ.

AWS is the market leader in cloud computing but it's facing competitive heat from Alphabet Inc (NASDAQ: GOOGL) (NASDAQ: GOOG) and International Business Machines Corporation (NYSE: IBM) as well as Oracle Corporation (NYSE: ORCL), who are all vying for a larger share in the cloud pie.

Lucrative contracts from the public-sector assume significance, as private small launch startups have been hit hard by the pandemic.

Price Action

Amazon shares traded 0.47% higher at $2,693.10 in the after-hours session on Monday. The shares had closed the regular session 0.46% lower at $2,680.38.

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