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Home » Amazon Shocker: CEO Jassy Says Cloud Less than 5% of All IT Spending
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Amazon Shocker: CEO Jassy Says Cloud Less than 5% of All IT Spending

Bob EvansBy Bob EvansApril 2, 2021Updated:April 13, 20234 Mins Read
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Nintex ad about process governance

Nintex ad about automating cloud platform providers

While businesses across the globe have been surging into the cloud, Amazon CEO Andy Jassy says the cloud still accounts for less than 5% of global IT spending.

On my weekly Cloud Wars Top 10 rankings, Amazon’s AWS is #2 behind #1 Microsoft. 

I cite the term “shocker” in the headline because, over the past several months, we’ve all seen plenty of examples of big cloud vendors saying something to the effect that only 15% or 20% of workloads have been moved to the cloud, leaving an enormous opportunity for that other 80% to 85%.

And while I realize that “workloads” doesn’t equate precisely to Jassy’s categorization of “global IT spend,” his comment dramatically underscores the staggering potential size of the enterprise-cloud market relative to current spending patterns.

Recall that Jassy, after 15 years as the creator and driving force behind the phenomenally successful AWS, recently was promoted to CEO of the entire Amazon empire as Jeff Bezos devotes full time to the role of executive chairman.

To give you the full context of Jassy’s remarks, here’s what he said in a March 23 email to AWS employees regarding the imminent arrival of former Tableau CEO Adam Selipsky as CEO of AWS. And I’ve highlighted the relevant sentence.

I want to share that Adam Selipsky will be the next CEO of AWS.

Adam is not a new face to AWS. Back in 2005, Adam was one of the first VPs we hired in AWS, and ran AWS’s Sales, Marketing, and Support for 11 years (as well as some other areas like our AWS Platform services for a spell). Adam then became the CEO of Tableau in 2016, and ran Tableau for the last 4.5 years. Tableau experienced significant success during Adam’s time as CEO—the value of the company quadrupled in just a few years, Tableau transitioned through a fundamental business model change from perpetual licenses to subscription licensing, and the company was eventually acquired by Salesforce in 2019 in one of the largest software acquisitions in history. Following the acquisition, Adam remained the CEO of Tableau and was a member of Salesforce’s Executive Leadership Team.

Adam brings strong judgment, customer obsession, team building, demand generation, and CEO experience to an already very strong AWS leadership team. And, having been in such a senior role at AWS for 11 years, he knows our culture and business well.

With a $51B revenue run rate that’s growing 28% YoY (these were the Q4 2020 numbers we last publicly shared), it’s easy to forget that AWS is still in the very early stages of what’s possible. Less than 5% of the global IT spend is in the cloud at this point. That’s going to substantially change in the coming years. We have a lot more to invent for customers, and we have a very strong leadership team and group of builders to go make it happen. Am excited for what lies ahead.

I have frequently stated that the enterprise cloud represents the greatest growth market the world has ever known. For calendar 2021, just the companies in the Cloud Wars Top 10 will generate cloud revenue in the range of $235 billion, with most of those companies having cloud businesses that are growing at or above 20% per year. 

And without question, Andy Jassy understands the dynamics of the enterprise-cloud marketplace as well or better than any executive in the world. So when Jassy says that the cloud, in spite of the current spending boom, still accounts for less than 5% of global IT spending, then that surely means that the cloud revolution—as robust as it already is—has only just begun.

RECOMMENDED READING

10 Questions for Amazon Web Services CEO Adam Selipsky

SAP, Oracle, and Workday Reviewed by Customers: Who’s #1?

Fastest-Growing Major Cloud Vendors: Google #1, Oracle #2, Microsoft and ServiceNow #3

Workday Co-CEO: Liberating CFOs from ERP Limitations

Has Salesforce Beaten Microsoft, Oracle & SAP to #1 in Industry Clouds?

As Marc Benioff Torches Microsoft, the Cloud’s Unique Value Is Revealed

SAP Rejects Larry Ellison Claims of Customer Turmoil: ‘Demand Is Exploding’

Microsoft CEO Nadella: Leaders Realized, ‘I Won’t Exist if I’m not in the Cloud’

Subscribe to the Cloud Wars Newsletter for in-depth analysis of the major cloud vendors from the perspective of business customers. It’s free, it’s exclusive and it’s great!

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Bob Evans

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Cloud Wars Founder Bob Evans actively analyzes the Cloud and AI categories through video reports, in-depth analyses, and interviews with the Cloud and AI market’s leaders and innovators. He’s also the creator of the Cloud Wars Top 10, a ranking and ongoing analysis of the world's most influential tech companies driving digital business and the digital economy. Bob is recognized as a world-class strategic communicator focused on emerging business strategy, disruptive innovation, and forward-looking leadership.

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