Once a nice little hustle for Amazon’s e-commerce business, AWS has grown over the years to become a behemoth with a $ 27 billion execution rate, a figure that continues to grow at 45 percent per year. That’s a very successful business by any measure, but as I listened to AWS executives last week at their AWS: Invent conference in Las Vegas, I didn’t hear from a group that would be content to sit still and let growth do the talking. If only. Instead, I heard one who wants to master every area of business computing.
Whether it was hardware like the new Inferentia chip and Outposts, the new local or blockchain servers, and a base station service for satellites, if AWS saw the opportunity, they weren’t giving an inch to anyone.
Last year, AWS announced 1,400 amazing new features, and they were said to be on track to beat this year. They get a lot of credit for not falling asleep on their laurels and continuing to innovate as a much smaller company, even when they own a slice of the market.
The inflation feature probably can’t last forever, but for now at least they show no signs of slowing down, as the announcements hit a furious pace once again. While they will tell you that every decision they make is about meeting customer needs, it is clear that some of these announcements were also about responding to competitive pressure.
Chase the competitors harder
In the past, AWS kept criticism of competitors to a minimum, perhaps giving Oracle a small blow, but this year they seemed to increase. In their presentations, AWS CEO Andy Jassy and Amazon CTO Werner Vogels continually lashed out at Oracle, a competitor in the database market but hardly a major threat as a cloud company in this moment.
However, they adapted to the Oracle market with a new system in the mainframe called Outposts, which allows AWS customers to operate in the cloud and in the cloud using a single AWS dashboard or one from VMware if customers they prefer it. That’s the kind of cloud vision that Larry Ellison may have presented, but Jassy didn’t necessarily see that he was chasing Oracle or anyone else. “I don’t see Outposts as a shot through the bow of anybody. If you look at what we are doing, you are very informed by the customers,” he told reporters at a press conference last week.
However, AWS did not reserve its criticism for Oracle alone. It also targeted Microsoft, attacked Microsoft SQL Server, and also announced Amazon FSx for Windows File Server, a tool specifically designed to move Microsoft files to the AWS cloud.
Google also did not skimp on launching Inferentia and Elastic Inference, prompting Google to realize that AWS was not going to cede the AI market to Google’s TPU infrastructure. All these tools and much more were more than a response to customer demand, they were about notifying the competition in all aspects of business computing.
Upward growth trajectory.
The cloud market continues to grow at a dramatic rate, and as a market leader, AWS has been able to leverage its dominance in the market to this point. Jassy, echoing Google’s Diane Greene and Oracle’s Larry Ellison, says that the industry as a whole is still very early on cloud adoption, which means there is still a lot of market left to capture.
“I think we are in the early stages of corporate and public sector adoption in the US. Outside of the US, I would say we are 12-36 months behind. So there are a lot of major companies that are just starting to plan their cloud approach, “said Jassy.
Patrick Moorhead, Founder and Principal Analyst at Moor Insights & Strategy, says AWS has been using its market position to keep expanding in different areas. “AWS has the scale right now to do a lot of things that others can’t, especially the smaller players like Google Cloud Platform and Oracle Cloud. They are trying to make a point with the thousands of new products and features they introduce. This serves as a long-term disincentive for other players, and I think it will result in a shakeup, “he told TechCrunch.
When it comes to the frenetic pace of innovation, Moorhead believes it cannot last forever. “For me, the question is when will we get to a point where 95% of the needs are met and the innovation rate is not required.” Every market, literally every market, reaches a point where this happens, so not it is a question of if, but when, “he said.
Certainly, areas like the AWS ground station announcement showed that AWS was willing to expand beyond the conventional boundaries of business computing and into outer space to help businesses process satellite data. This ability to think beyond traditional uses of cloud computing resources shows a level of creativity that suggests there may be other untapped markets for AWS that we have not yet imagined.
As AWS moves to more areas of the enterprise computing stack, whether on premises or in the cloud, they are showing their desire to dominate all aspects of the world of enterprise computing. Last week they showed that there is no area in which they are willing to surrender to anyone.