Amazon has reported better-than-expected earnings for the fourth quarter of 2024, with a significant increase in net income attributed to cost-cutting measures and strength in its cloud business. Despite this positive performance, the company provided disappointing guidance for the current quarter, projecting sales that fall short of analysts' expectations. Amazon Web Services (AWS) continues to be a dominant player in the cloud market, but its growth rate of 19% lags behind competitors that are experiencing growth rates above 30%. This slower growth raises concerns about AWS's position in the increasingly competitive landscape of AI workloads.
The labor market is showing signs of cooling, with recent revisions indicating a slower decline in job growth than previously anticipated. The tech sector added nearly 7,000 jobs in January, but the tech unemployment rate has risen slightly to 2.9%. A survey revealed that over 75% of businesses are struggling to meet their IT talent needs, particularly in areas like machine learning and cybersecurity. This has led many companies to focus on upskilling existing employees to address the talent shortage.
In the small business sector, transactions rose by 5% in 2024, with a notable increase in technology-related acquisitions. Despite inflation and rising costs, demand for stable, recession-resilient businesses is growing, prompting brokers to predict an increase in seller financing amid tight lending conditions. The surge in technology transactions indicates a strong interest in IT services and software firms, which may be well-positioned for growth and acquisitions in the current market environment.
Microsoft's Copilot Plus PCs have struggled to gain traction in the market, with disappointing sales figures attributed to high prices and a lack of compelling applications. Consumers are not actively seeking AI features, highlighting a disconnect between marketing efforts and real-world demand. This situation underscores the broader challenges of AI adoption, as companies like Microsoft work to clarify the value of their products in a competitive landscape.
Four things to know today
00:00 Tech Talent in Demand as Companies Struggle to Fill AI and Cloud Roles
05:33 Copilot+ PCs Struggle as Shoppers Say ‘No Thanks’ to AI Upgrades
06:55 Amazon’s Profits Jump, But Is AWS Falling Behind in the AI Cloud Race?
09:13 SolarWinds Sells for $4.4B—And N-Able Might Be Next
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Business of Tech: Daily 10-Minute IT Services Insights