EVP & Head of Marketing,
Cloud returned in full force to the Las Vegas desert with 25,000+ vaccinated and masked attendees at this year's AWS re:Invent. As another conference passes behind us, one could readily build the case that the gap is further widening vs. narrowing between the three big cloud hyperscalers.
While both multi-cloud diversity and competition will always exist, it is evident from this year’s event that the flywheel effect, which we have all seen with Amazon, is now taking a similar shape with AWS cloud services. It becomes harder and harder not to have AWS as a core part of a company’s cloud and overall innovation-driven growth strategy.
With its annual run rate now crossing $60B and its y/y growth percentage at 39%, AWS just keeps expanding and innovating across all areas with 200+ services and 475+ compute instances operating across 81 global availability zones. A cloud juggernaut that is not slowing down.
The following are some notable highlights and observations from this year's conference.
CEO handover – The technology world was at the edge of its seats to see how well AWS’s new CEO Adam Selipsky would be able to pick up the baton from Andy Jassy. While during this year’s CEO keynote, there was notably less coverage and technical depth of new service announcements than in Andy’s previous keynotes, Adam did a really nice job in creating his own identity with a well flowing mixture of new AWS services announcements, interesting customer stories, and a few fun-filled vignettes of history pathfinders, including Hank Luisetti who revolutionized basketball with the running one-handed jump shot.
As Andy had done in the past, Adam also reminded everyone that this cloud journey is still in an embryonic state, citing "only 5-15% of spending has moved to the cloud, so there's a big opportunity to come, with 5G and IoT becoming super important too". This remains an astonishing fact when you stop and think that the real growth for this cloud industry is still out in front of us.
As part of Adam’s keynote, Nasdaq CEO Adena Friedman spoke about their own pathfinding experience, including a stated goal to be the first market exchange that is 100% cloud-enabled. This includes putting Nasdaq's core matching engine for Options on an AWS local zone in 2022. The audience also heard from Marc Rouanne, chief network officer at DISH Wireless, about how Dish is navigating this journey with a major business model reinvention underway. Partnering with AWS, Dish is building out a 5G network backbone to ultimately become a network of networks connecting edge to cloud in a simplified manner.
Watch Adam Selipsky's CEO Keynote here, and browse the AWS YouTube channel for other sessions.
Elastic Compute Cloud (EC2) – With a projection of 500 instance types by year-end, there is certainly something for everyone. Some could argue perhaps too many options exist, but AWS differentiates itself by offering form fit platforms built to match a customer's specific needs.
One of the larger announcements was the newest generation of AWS's ARM custom silicon processors, the Graviton3. AWS reports that its new chip is 25 percent faster than its current Graviton2 chip, improves 3x on machine learning (ML) performance, and will use 60 percent less power, lowering the carbon footprint. AWS additionally released the first machine learning chip, called Inferentia, to increase performance associated with ML inference processing. Also announced was the new Trn1 instance, powered by Trainium. AWS last year launched Trainium, a chip purpose-built for training deep learning models. With a wide mix of processors and instance options from Intel, AMD, Nvidia, and custom AWS AMR chips, AWS far and away offers the market's best compute platform flexibility. Now let's just see if and when a future announcement ever comes for GravitonQubit as the natural evolution into AWS Cloud Quantum computing.
Database, analytics, and machine learning – Vice President, Amazon Machine Learning, Swami Sivasubramanian, who always does a fabulous job on his keynote, put it simply that business "survival comes from those who are most informed." AWS continues to go both deep and wide on providing high-performing, secure data services. Aurora continues as AWS's fastest growing service. Redshift was cited as providing 3x the performance over other cloud data warehouse options, which would include others like Snowflake and Databricks, which subsequently also both run on AWS.
As the topic of security remains top-of-mind for each and every company, governance advancements to AWS Lake Formation were announced, including row and cell-level security. A new no-code orchestration process for accessing data, preparing data, and building AI models was announced as Amazon Sagemaker Canvas. But perhaps Dr. Swami's most important announcement was focused on building grass-root data and AI/ML experts around the globe with the offering of Amazon SageMaker Studio Lab at no cost. This announcement was coupled with a ten-million-dollar scholarship program to help build future innovators and innovations.
Watch Dr. Swami Sivasubramanian's Database, Analytics, and Machine Learning Keynote here.
Cloud "anywhere" extensions – An area where AWS is distancing itself from the other hypervisors continues to be its cloud anywhere options, offering customers the ability to run in AWS Regions, AWS Local Zones, AWS Wavelength "Edge" Zones, AWS Outposts "Hybrid Cloud" and for those out on oil rigs and cruise ships AWS Snow "Rugged Edge." With a secure fiber link backbone connecting its various regions, AWS's expansion will continue so that no place on earth will be unreachable.
Also announced this year was AWS Private 5G, a managed service for deploying, operating, and scaling private cellular networks on-premises with integrated hardware and software. Taking AWS services all the way to the edge creates a tremendous opportunity for society as applications get built and deployed for the creation of smart cities, factories, hospitals, transportation, and more.
Partners and marketplaces –As Doug Yeum steps down as worldwide head of AWS Channels and Alliances to move over to Amazon's retail business, he passes the torch to Ruba Borno, formerly SVP of Cisco's customer experience centers. Doug has been instrumental in bringing more structure to the AWS Partner Network (APN) and helping to further scale it to more than 100,000 partners worldwide. One important evolution of the APN was this year's designation of 5 distinct partner paths, software, hardware, services, training, and distribution, to allow for more focus and partner assistance.
When it comes to marketplaces, every major software company has a different approach, with many of these marketplaces, unfortunately, becoming a little more like junkyards for unused widgets. The AWS Marketplace is clearly not one of them; it continues to expand by supporting multiple product categories, including industry SaaS Solutions, Data Exchange via top data providers, Machine Learning Models, APIs, Containers, and Professional Services packages. AWS provides a flexible procurement process around these services, making it easier for sellers in the marketplace to promote and get paid for their products and services. As its parent Amazon has revolutionized eCommerce, AWS is not surprisingly progressing in a similar manner with its own cloud eCommerce site.
Watch Doug Yeum's Partner Keynote here.
Industry solutions – With most of AWS's focus being heavily concentrated on IaaS and PaaS-based services, progress is starting to emerge on industry-based services. Included were strategic announcements, such as:
One can also expect more customer partnership models like the one between AWS and Goldman Sachs, Financial Cloud for Data, a new suite of cloud-based data and analytics solutions for financial institutions.
AWS will no doubt have to expand more into the broader SaaS space as they evolve their cloud business model. Driving ISV SaaS migrations to AWS cloud services, continuing to add more SaaS solutions onto its Marketplace, creating more of its own SaaS services such as AWS Connect, and adding additional strategic partnerships to create SaaS solutions with progressive companies like Goldman Sachs (Finance Services), Dish Network (Telco), Nasdaq (Financial Markets) and ADP (SMB/SME Markets) will help close the SaaS gap. One missing link which may likely come in the future is a real no/low code AWS cloud-native application builder.
Closing thoughts - While AWS may not fit the needs of every company, they are driving new innovation in so many important categories that everyone will win in the long run, either directly or indirectly. AWS is going both deep and wide across public and hybrid cloud. It has been the market leader in IaaS/PaaS for the last decade; it will be good to see if this historically infrastructure-based company can also thrive in the upcoming SaaS application era. Lastly, AWS focuses heavily on partner success and is driving a B2B marketplace which may eventually drive as much success as Amazon's B2C marketplace. Is the market ready for the equivalent of a one-stop-shop, AWS "Prime" Cloud?
The AWS flywheel effect is clearly in full gear. It will be interesting to see what many advancements will happen in the years to come, let alone by next year's re:Invent conference.
Jim brings more than 25 years of experience in technology leadership across a wide variety of industries, technology domains, and platforms. Prior to joining Virtusa, Jim was a Vice President of Financial Services for American Management Systems (AMS). Jim is a patent holder in Distributed Objects, Imaging, and Workflow Technology within International Trade Finance. Jim holds a MBA in Management Information Systems from Binghamton University.
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