AWS Earnings Takeaways: Slow 2023 Ahead, Amazon Layoffs

Jassy On AWS: ‘A Lot Of Growth’ Ahead Even With Enterprises ‘Acting Cautiously’

Andy Jassy recognized that enterprise customers are spending less in the current economic climate.

“Most enterprises right now are acting cautiously. You see it with virtually every enterprise, and we’re being very thoughtful about streamlining our costs as well,” said Jassy. “When you are being cautious, you look for ways [where] you can spend less money.”

Jassy said AWS was built to help customers find a way to spend less money.

“We are not focused on trying to optimize in any one quarter or any one year—we’re trying to build a set of relationships in business that outlast all of us,” Jassy said.

“So if it’s good for our customers to find a way to be more cost effective in an uncertain economy, our team is going to spend a lot of cycles doing that. And it’s one of the advantages that we’ve talked about since we launched AWS in 2006 in the cloud—which is that when it turns out you have a lot more demand than you anticipated, you can seamlessly scale up. But if it turns out that you don’t need as much demand as you had, you can give it back to us and stop paying for it. And that elasticity is very unusual. It’s something you can’t do on-premises, which is one of the many reasons why the cloud is and AWS are very effective for customers,” Amazon’s CEO said.

He also reminded analysts and listeners who were attending the earnings call that the global majority of IT spending is still spent around on-premise infrastructure. In fact, he said 90 percent to 95 percent of worldwide technology spending is still on-prem.

However, Jassy believes that is going to “shift and flip” over the next decade.

“I don’t think on-premises will ever go away, but I really do believe in the next 10 to 15 years that most of it will be in the cloud if we continue to have the best customer experience,” he said. “It means we have a lot of growth in front of us in the AWS business.”