Amazon Says 300 Government Agencies Using Web Services

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By David Zielenziger | October 11, 2012 12:59 AM EST

Amazon.com Inc. (Nasdaq: AMZN), the No. 1 e-retailer, said more than 300 government agencies and 1,500 educational institutions are using its Amazon Web Services for cloud computing.

The announcement shows the Seattle-based bookseller is using its internal systems to compete against major computer services providers such as Hewlett-Packard Co. (NYSE: HPQ) and International Business Machines Corp. (NYSE: IBM).

Analysts estimate Amazon may derive as much as 15 percent of revenue from its computer services arm, which was set up to support the company’s global order and fulfillment network.

In Washington on Wednesday, Amazon disclosed clients now include the U.S. National Institutes of Health, NASA and the Washingtomn state government. University clients include Harvard, New York University and Georgetown University.

“Government agencies and educational institutions are rapidly accelerating their adoption of the Amazon Web Services Cloud,” said Teresa Carlson, VP of the company’s worldwide public sector.

Amazon also announced enhanced services and high-performance capabilities for what it calls its GovCloud region.

Shares of Amazon fell $1.01 to $249.95 in early trading.

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