Amazon Web Services held its third annual re:Invent conference in mid-November, and while there were plenty of new tools and services for developers, this was the year AWS showed it's now fluent in the language of the enterprise IT buyer.
There is now a center of gravity around AWS that makes it impossible for enterprises—and, by extension, enterprise solution providers—to ignore. In a press conference at re:Invent, Andy Jassy, senior vice president of AWS, said the company now has more than 1 million active customers using its cloud. AWS is growing revenue at more than 40 percent year over year, which makes AWS the "world's fastest-growing enterprise IT company," he said.
Jassy has said his boss, Amazon CEO Jeff Bezos, is "very excited" and optimistic that AWS eventually could become the company's biggest moneymaker. That's a bold statement considering that Amazon generates some $70 billion annually from its retail business.
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AWS clearly has learned a ton about using the cloud to run IT more efficiently, and now it's using this knowledge to go after traditional enterprise vendors. At re:Invent, AWS took a shot at Oracle's database cash cow by launching Aurora, a MySQLcompatible relational database engine it claims is faster than existing offerings at one-tenth the cost.
AWS executives also tried to show attendees that enterprises are using its cloud to handle mission-critical functions, as opposed to just testing and developing software. A parade of enterprise executives appeared on stage during the keynotes, including leaders from Coca-Cola, Condé Nast, Major League Baseball, Intuit and Splunk, to talk about how they've moved parts—or in some cases, all—of their on-premise computing to the AWS cloud and never looked back.
While not everything Amazon does is a success —the Fire smartphone is a notable example— AWS is one big gamble that did pay off, Bezos said at Business Insider's annual Ignition conference earlier this month.
Bezos said it's vitally important for companies to take chances on projects that might not work out, noting that these can be great learning experiences.
"Companies that don't continue to experiment, that don't embrace failure" often run into problems later on, Bezos said at the conference according to media reports.
The momentum AWS is seeing could be why the company isn't worrying about competitors Google and Microsoft, which have decided to compete with AWS by trying to undercut it on pricing. "If you look at the amount of functionality, the number of services, and the features within those services, we have a lot more functionality in our platform than any other provider," Jassy said in a Q&A at the conference.
But while AWS has a large and active partner ecosystem, traditional enterprise solution providers—the types that partner with vendors such as Hewlett-Packard, Cisco Systems, IBM and Oracle—haven't really embraced AWS en masse.
This is the case for a number of reasons. Many traditional solution providers are still making lots of money selling private clouds, and they haven't made the skills investment in hiring public cloud services and consulting expertise. There's also a belief in some circles that working with AWS amounts to a betrayal of enterprise vendor partners, some of which used to try and steer them away from AWS.
But judging from the action at re:Invent, and the fusillade of new products and services that came out of the show, there are some traditional solution providers that have decided they can no longer afford to ignore AWS. The thinking, according to some of these partners, is that AWS has grown so large and diverse that they have little choice but to work with it.
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