PM estimation: size the yearly revenue of Amazon's cloud computing business

Estimate how much revenue Amazon Web Services (AWS), Amazon's cloud computing business, brings in over one year. Explain the approach and the assumptions behind your number. ```hint Customers are far from equal Cloud spending is heavily concentrated: a small number of very large accounts spend orders of magnitude more than the long tail. Build segments that reflect that, keep your units consistent, and then check the result with a second, independent method. ``` ### Clarifying Questions - Which year should the estimate describe: the latest full year, the current year, or a forecast? - Should revenue cover only what outside customers pay, or also the cloud capacity Amazon's own businesses use? - Is a worldwide figure across all AWS services expected, or a specific region or product line? - Do you want a bottom-up build from customers, or is a top-down estimate from the size of the cloud market acceptable? ### What a Strong Answer Covers - A defined revenue scope and a written equation before any numbers. - Customer segments that reflect spend concentration, each assumption labeled and rounded, and segments that add up to a plausible customer count without double counting. - Clean arithmetic with consistent monthly versus annual units. - An independent cross-check, such as market size times share, and a reconciliation of the two results. - The assumptions the answer is most sensitive to and how to tighten them. ### Follow-up Questions - Which single assumption moves your estimate the most, and how would you narrow it? - How would you split the total across compute, storage, databases and other services, and why might that view matter? - How would you turn your estimate into a forecast for the next three years?