Welcome to the Cloud Wars Minute — your daily cloud news and commentary show. Each episode provides insights and perspectives around the “reimagination machine” that is the cloud.
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This Cloud Wars Minute discusses some of AWS’ enduring strengths and how they might affect its performance moving forward.
Highlights
00:12 — I’ve talked a lot recently about AWS’ declining growth rates and how those have been significantly steeper than those of its competitors. In spite of the declining growth rates, here are five reasons customers might continue to love AWS — with some conditions.
00:50 — First, the scale. There was $22 billion in revenue for the quarter ended June 30. It’ll definitely do $90 billion in revenue this year. AWS is significantly bigger than Procter and Gamble, Siemens, Disney, Sony, Wells Fargo, Nissan, and T-Mobile. It’s got a massive number of customers.
01:54 — Second, it is still the cloud infrastructure leader. The challenge there, though, is that customers want much more than infrastructure. They’re into the software side of things now, where AWS is not so strong. Third, AWS has a powerful focus on pleasing customers. That has been a major reason why customers have stayed with AWS. Fourth, AWS’ long commitment to innovation continues.
03:02 — Also, there’s the huge generative AI opportunity that CEO Andy Jassy described in detail. But AWS’ achievements are less relevant if it cannot take all that success and apply it to the world’s new needs. Those tilt strongly toward software.
04:05 — The reality that Jassy did not talk about is that those competitors are all much more capable than they’ve been in the past. Can AWS scale up in software the way it did in infrastructure? Overall, in the Gen AI side, AWS is clearly doing a lot, but these other companies have been at it for a lot longer and more deeply.
04:51 — AWS does not have the first-mover advantage that it had with infrastructure. It’s going to have to fight much harder than it did in the past to distinguish itself from its competitors.
