It enables stable, dependable streaming services. It hosts digital tools that make it possible to create next-generation space crafts. Fortune 500 companies leverage its computing power to analyze their data. It stores some of the most sensitive information from countries all over the world. Even Amazon’s competitors in the e-commerce industry rely on it to make sure their websites won’t crash during traffic surges. And it all began as the back end of a visionary book-selling platform that would transform the way we buy and sell goods.
Since its inception, AWS has been at the forefront of the digital revolution, but why? How did an offshoot of the largest retail business on the internet become the dominating force in the cloud computing sphere?
A little history first
Founded in 1994, Amazon started as an online book buying and selling platform that many in the tech industry saw as a simple novelty, not something to make much about. However, it didn’t take much time for the company to prove that it was here not only to stay but to take the book business by storm, and it wasn’t stopping there. In less than a decade, Amazon was already the largest online retailer in the world, selling music, videogames, electronics, software, clothing, furniture, toys, and basically everything under the sun that could be bought or sold. By the dawn of the new millennium, Amazon was the largest internet-based business the world had ever seen; it still is today.
But making this larger-than-life retail monster run smoothly required a variety of resources like the world had never seen before, all at an unprecedented scale. It was not only about maintaining a broad selection of products for the customers to choose from; that was the easy part (if someone can ever say that); the challenge was at the other end of things. Everything, from logistics, inventory, databases and storage, to computing power, had to work flawlessly so the buyers could get what they ordered as they ordered it.
How to make such a complex machine work when some of the necessary parts hadn’t even been created, or they didn’t exist at the scale required? The most complex easy answer: by making them themselves so they could control all the variables.
From the IT side of things, specifically, in the early 2000s, the founder and then CEO of Amazon, Jeff Bezos, and his executive team started to bring more and more software engineers on board, knowing that they had to develop their own tools and solutions to secure the reliable, scalable, cost-effective digital infrastructure services Amazon needed to sustain its vertiginous upwards trajectory. A case of “if you want it done right, do it yourself.”
They did it, and they did it right. In an interview with Intelligencer Magazine, in late 2018, Andy Jassy, former CEO of AWS, said that during a meeting at Jeff Bezos’ house, in the summer of 2003, while analyzing what they regarded at the time as Amazon’s core competencies, they concluded that the company had become so good at developing its own digital solutions that they might be sitting in a goldmine.
“We started off with fairly obvious things, like we were good at having a lot of selection in retail, and we were good at fulfilling that selection, but when we looked into it more deeply, we realized that in building Amazon’s consumer business as fast as we had in the first eight years, we’d gotten really good at operating infrastructure services, things like computing and storage and database,” Jassy recalled.
According to the former AWS CEO, they became remarkably good at running reliable, scalable, cost-effective data centers at the right scale and price. So confident they felt about the infrastructure they created that they started to explore the possibility of offering it to developers and enterprises alike.
What if they provided their web-based infrastructure services to companies for them to develop their own applications? That idea would require the internet to become the operating system, but did the key components for an internet operating system exist at the time? They found out quite quickly that they didn’t, so in typical Amazon style, they decided to build them.
Bezos, Jassy ant their team knew that there was a need out there for their idea; the question was, would the market buy storage, database, computing services from the online bookstore turned e-commerce juggernaut?
Now we know the answer to that. By launching Amazon Web Services (AWS) in 2006, Amazon started an ongoing technological revolution, changed computing for good, and created the US $300 billion -and growing- industry we now know as cloud computing.
He, who strikes first…
With AWS, Amazon not only was the first in the game, but it also created it and wrote the rules, which gave it an undeniable edge over its competition. In fact, it took its closest competitor six years to develop a response.
Such a head start gave AWS much-needed time to perfect their technology without having to look over their shoulder to see what the other players were doing. It also established them as the household name and gave them years of invaluable feedback from software developers, engineers, and architects all over the world.
But while the adage says, “he, who strikes first, strikes twice,” it doesn’t mention anything about winning the fight.
Yes, in technology development, a six-year head-start could be counted in dog years, but traditional tech companies have been at it with all their might for years, trying to catch up, reminding AWS that their reign is not a given. Now, AWS has reasons to be on the lookout as competition steepens, but they are not slowing down.
Today, that little concept Amazon created in the early 2000s that we now know as ‘cloud computing’ has become the backbone of the global economy; every bit of information that matters goes through the cloud in one way or another. Why? Well, in a nutshell, as the internet developed, broadband access became the norm, and mobile connectivity took off, the amount of information being generated and disseminated through the web grew exponentially, creating new problems for organizations:
1. Where to store all that data
2. How to compute it without crashing their systems
3. How to keep it secure.
Traditional on-premise infrastructures came up short and proved inconvenient and outdated. On the other hand, the cloud offered the possibility of storing limitless amounts of data at scale, with no need for organizations to dispose of the physical space required to store servers, or the resources necessary to maintain, manage, and keep systems updated.
The same applies to computing power. Companies experiencing constant surges in traffic now had all the computing power necessary to keep their business running during peak times; on off-peak times, they could just downscale as needed so they wouldn’t have to pay for services they weren’t using.
The thinking heads at Amazon were right from the beginning; the need was there; the world just didn’t know it then.
According to the research and analysis firm Canalys, in Q2 2021, global cloud infrastructure services spending increased 36% to US$47.0 billion. Compared to Q2 2020, cloud expenditure increased by over US$12 billion as workload migration and cloud-native application development accelerated.
Q2 2021 results marked the fifth consecutive quarter to register an increased growth rate compared to the previous quarter. Once again, Amazon Web Services (AWS) came on top, accounting for 31% of total spending, after growing 37% annually. As AWS grows, its market share accounts for that of its two closest competitors combined, something that has stayed a constant for the past five quarters.
“The guts of Amazon”
Undoubtedly, timing played an essential role in AWS hegemony, but it can’t be credited as the sole reason for its success; especially, when the other runners in the race are some of the biggest names in the tech industry.
From the beginning, Bezos and his team knew that at its core, AWS should be above all about service, so the attention to customers’ needs became the hallmark of the AWS value proposition.
In the words of Jeff Bezos, “There’s a hidden Amazon, just under the epidermis, the guts of Amazon, this is all the stuff we have to do on the back end to make this work.”
In a nutshell, with AWS, Amazon made their secret sauce available for the world to have as a service. The premise was simple, what’s good for Amazon had to be just as good for any organization, so with the launch of services like S3 and EC2 in 2006, and basically every product and service since, the company has been making publicly available what they developed, tested, and perfected for their own business first.
Amazon’s confidence in AWS products and services lies in its own experiences, its failures and successes during the developing process, giving them a clear focus on the solution architects, builders, and implementers through a service-oriented architecture, with business logic and data accessible over application programming interfaces (APIs).
AWS’s current catalog comprises more than 200 services. Admittedly, it is extensive, but the level of choice it offers has proved an invaluable resource for application builders and implementers alike. For instance, while other cloud providers offer a single database service, AWS has four from where to choose.
As a natural consequence of such a broad, complex portfolio, AWS support teams and sales force need to be highly versed in the technical aspects of the business, which makes the pre-sales, purchase and implementation processes much friendlier to the customer.
Additionally, AWS is constantly creating innovative services for Amazon and then making them available in the public cloud. Lambda is a good example. Amazon initially developed this event-based, serverless computing platform for Alexa, its AI-powered, highly successful virtual assistant. Only after proving ready for prime time was it incorporated into the AWS service portfolio.
But a pioneering, costumer-oriented outlook is only part of the story; there’s more to the success of AWS. The other two essential components to keep AWS as the world’s #1 cloud service provider are pricing and security.
AWS services are cost-effective but also more convenient thanks to the pay-as-you-go pricing model the company pioneered -and the competition would eventually adopt. Accessible pricing, paired with how reliable and scalable the company’s cloud storage and computing services have proven to be, undeniably makes up for a very tough-to-beat proposition. Nonetheless, in a world where for every technological breakthrough there are evermore advanced cyberthreats been created, to stay competitive in the long run, cloud providers need to make their solutions not only secure but future-proof. That’s no easy task, and AWS takes it very seriously.
To assure end-to-end operational support to its customers, no matter what, AWS has scattered its infrastructures throughout the world, placing its servers in secret locations accessible only on an essential basis.
Today, AWS spans 245 countries and territories with 81 availability zones in which its servers are located; each of these zones is divided so that users can set geographical limits on their services if required, but also to increase security by diversifying the physical locations where data is hosted. In addition, the company actively works in fine-tuning its cutting-edge Artificial Intelligence and Machine Learning products to create cybersecurity products capable of predicting, adapting, and neutralizing anything the cybercriminals might come up with, now or in the future.
Brace for a vibrant race
But what can the things we know right now tell us about the future of the race for cloud dominance? Can AWS sustain its leadership position much longer?
One thing is clear, for the past two years, cloud providers, in general, have registered significant growth, and the trend is predicted to continue. In some cases, their gains are fueled by the increased demand from existing customers` need to migrate their infrastructures to a cloud environment. In other cases, growth comes primarily from an emphasis on hybrid and multi-cloud environments and sectors such as retail, healthcare, and government investment.
The race is changing, but so is the playing field. According to the research firm Gartner, in 2020, IT spending worldwide accounted for $3.8 trillion, which means that the cloud infrastructure market represented only 7% of the world’s total IT spending, leaving a lot of room for growth in the immediate future.
The cloud industry is a universe in expansion, not a limited pie from which each participant’s gains imply a loss for the others. Gartner’s numbers show that although the top-five providers account for 80% of the revenue, virtually every participant is growing.
With public cloud market maturity, it becomes more apparent that we are bound to an environment where, above the underlying technology, organizations will prioritize things like the providers` customers approach, the strategic alliances they hold with other vendors, their ability to cater to industry-specific needs, and the kind of partnership they can build together. More than mere providers, cloud offerors are beginning to be seen as strategic partners, allies with whom to create a shared future.
In such a context, its service latitude and maturity, customer-oriented philosophy, real-world-tested-before-launch technology, and its already-in-place advances on edge computing, AI, and 5G implementation give AWS a good chance to stay ahead in this expanding playing field for the foreseeable future. However, more likely than not, it will be the providers` ability to build solid long-term partnerships with their customers and smoothen their adoption of new technology through managed services that will determine who will lead the curve and who’ll be left behind. To learn more about how AWS cutting-edge technologies combined with the value offer of Intcomex Cloud can catapult your business to the next level in productivity and efficiency, visit https://cloud.intcomex.com/en/aws/