Welcome to the Cloud Wars Minute — your daily news and commentary show, hosted by Cloud Wars Founder Bob Evans. Each episode provides insights and perspectives around the “reimagination machine” that is the Cloud.
This episode is sponsored by Acceleration Economy’s “Cloud Wars Top 10 Course,” which explains how Bob Evans builds and updates the Cloud Wars Top 10 ranking, as well as how C-suite executives use the list to inform strategic cloud purchase decisions. The course is available today.
In this Cloud Wars Minute, I share my thoughts on AWS’s Q2 numbers, which revealed its growth rate fell yet again.
Highlights
00:21 — Amazon Web Services has been going through a tough time lately. It’s a remarkable story of how nobody owns first place. You’ve just got a temporary lease on that, and new competition, shifting market dynamics, customer choices and expectations can alter the balance of power very quickly.
00:49 — AWS’s growth rate fell yet again, and has now done so for seven straight quarters. Amazon CEO Andy Jassy referred to this as it stabilizing in Q2, because, as AWS went through the months of Q2, April, May, and June, it found that decline was not continuing.
01:32 — AWS declined to offer any sort of guidance or indication about Q3. I want to take nothing away from AWS: It’s now at an $88 billion annualized run rate; it grew 12%. And in just about any other industry, that would be seen as phenomenal, but this is not any other industry. AWS is up against some of the world’s most powerful technology companies competing in the Cloud Wars.
02:17 — The growth rates that AWS has shown just don’t stand up. Microsoft is bigger in the cloud, and Microsoft is growing much faster than AWS in the cloud. Google Cloud and Oracle are much smaller than AWS, but they’re also growing much, much faster. So something’s going on here.
03:12 — The artificial intelligence (AI) competition is ferocious, so it’s great that AWS is moving into a lot of these new generative AI things, large language models, training, inference, all of those things, but look at their competition: Microsoft, Google, and Oracle have all been in the AI game longer and more deeply than AWS.
04:07 — For AWS, just to say, “Hey, we’ve got new stuff coming out, we’re gonna jump into this” is good, but not at all sufficient when competing with Microsoft, Oracle, and Google.
05:04 — Maybe it’s going to turn around and maybe the second half of the year is going to be good. Amazon declined to offer any insight on that. You can take that as a plus or minus, but it would have helped its cause had it offered some indication of where Q3 or the second half of the year would go.
