E-commerce giant Amazon.com (NASDAQ:AMZN) has acquired NICE, a small company based in Italy, to be part of its growing Amazon Web Services business. NICE offers software and services for high-performance and technical computing that allow customers to optimize and centralize computing tasks that require a lot of performance. NICE also facilitates data visualization and supports mobile devices.
Amazon did not disclose financial terms, but said it expects the deal to close in the first quarter. Existing customers will not see any interruptions in service, and NICE will soon integrate with AWS.
Does it matter?
AWS continues to be an incredibly important business for Amazon. The cloud-computing segment has become so important that Amazon now discloses financial results for AWS. The company continues to expand its cloud-based offerings and remains the market leader by a large margin, so it makes plenty of sense to strengthen AWS through targeted acquisitions when appropriate.
For instance, AWS generated nearly $1.9 billion in operating income throughout 2015, for a 24% operating margin. That's meaningfully higher than the 4% operating margin that Amazon's core North American e-commerce business generates. Naturally, Amazon promptly reinvests those profits back into the business for future growth, so the contribution from AWS is extremely important to future results.
Evan Niu, CFA has no position in any stocks mentioned. The Motley Fool owns shares of and recommends Amazon.com. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.