AWS' portfolio evolution and business model expansion will drive continued high growth and enterprise adoption


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AWS' portfolio evolution and business model expansion will drive continued high growth and enterprise adoption

  1. 1. TBR T E C H N O L O G Y B U S I N E S S R ES E AR C H , I N C . TBR EVENT PERSPECTIVE AWS’ portfolio evolution and business model expansion will drive continued high growth and enterprise adoption re:Invent 2013 Las Vegas, Nov. 12–15, 2013 Author: Jillian Mirandi (, TBR Cloud and Software Analyst AWS re:Invent 2013 marks Amazon Web Services’ (AWS) second annual developers conference across AWS’ customers, developer base and partners. AWS highlighted and announced a vast number of cloud services at the conference, but what TBR believes took center stage was customers’ willingness to migrate to AWS, as well as the speed at which these customers complete migration and realize AWS-driven benefits. Customers leverage AWS in a number of different ways, and AWS has morphed its pay-as-you-go business model to best meet demand. AWS moves up the stack and further into the enterprise space with VDI, analytics and governance product announcements AWS made major product announcements during re:Invent, including Amazon WorkSpaces, a Virtual Desktop Infrastructure (VDI) service; Amazon Kinesis, a real-time big data analytics service; and Amazon CloudTrail, a governance and compliance service. TBR believes these products are the most impactful of the more than 200 cloud services and professional services brought to market or updated in 2013, and AWS’ announcement generated high levels of excitement from the audience and analyst community. AWS’ suite of cloud services is quickly moving up the stack from pure infrastructure to databases, VDI and application development services. These higher-level cloud services rapidly gain traction and move AWS into an enterprise vendor position. For example, Redshift, one of AWS’ database services that took years to build, is now AWS’ fastest-growing product. After its February launch, AWS added more than 40 new features to Redshift to improve performance.
  2. 2. TBR AWS also differentiates by streamlining the supply chain, enabling the company to control the cost of its services and offering new services at scale. Rather than using a third-party server vendor, AWS works directly with OEMs. By having close ties with OEMs, AWS not only ensures ample capacity, but customizes vanilla servers to run specific products. Since AWS maintains a high volume of transactions across its products, leveraging customized servers for each product improves performance quality and cuts costs through increased efficiency. AWS keeps a laser-sharp focus on ensuring its team’s technological understanding is top notch, shortening time to market and sales cycles According to TBR estimates, 60% of the AWS team is dedicated to R&D, allowing AWS to release several offerings in a short amount of time. In many organizations, the depth, breadth and speed of these offerings could result in an unprepared sales organization that cannot keep up with the speed of the technology shifts. AWS addresses this concern by requiring sales staff to have above-average technical skills and experience. In addition to having a skilled sales staff, AWS ensures customers are satisfied with its services. When it comes to technical products, support plays an important role in overall customer satisfaction. AWS addresses these concerns by first ensuring that the support staff has exceptional technical skills. AWS requires its technical support team to have the same certifications as the engineers do, thus ensuring a quality customer experience. Further, AWS invests heavily in its technical account manager (TAM) employees, who are responsible for ensuring enterprise customer success. The program is successful according to customer interviews, as one customer stated that he “couldn’t picture going back to working on AWS without [his] TAM — we love him and he has helped us leverage AWS in so many ways, and he also helps us save money by adjusting our pricing models.” Marquee customer Netflix helps AWS combat OpenStack by open sourcing its code for the greater good of the AWS community AWS is expected to grow at a high double- or triple-digit pace through 2015, driven by portfolio expansion, customers moving more workloads to cloud infrastructure and an evolving business model that will attract a wide variety of customers, developers and partners. To combat OpenStack, AWS works with the Netflix community. Although Netflix’s Open Source Software Center is not highly publicized, many developers leverage Netflix’s code to add specific modules not yet offered by AWS to their customer applications. Netflix is AWS’ marquee customer, as it was the first business to truly demonstrate the game-changing scalability of the AWS platform. However, we do believe the code available on OpenStack will eventually trump Netflix OSS, as it leverages contributions and support from vendors including IBM, HP, Red Hat and Cisco. TBR believes the market will begin to see what AWS calls “all in,” or data center free, customers in 2014. Today, data center free customers are largely from the born-in-the-cloud generation. However, at re:Invent, a few enterprise customers pledged to head in the “all in” direction and work toward consolidating and eventually eliminating their data center footprints. Even businesses in highly sensitive and regulated industries embrace cloud, with Dow Jones stating 60% of its business would be run on AWS in coming years. Technology Business Research, Inc. is a leading independent technology market research and consulting firm specializing in the business and financial analyses of hardware, software, professional services, telecom and
  3. 3. TBR enterprise network vendors, and operators. Serving a global clientele, TBR provides timely and actionable market research and business intelligence in a format that is uniquely tailored to clients’ needs. Our analysts are available to further address client-specific issues or information needs on an inquiry or proprietary consulting basis. TBR has been empowering corporate decision makers since 1996. For more information please visit ©2013 Technology Business Research Inc. This report is based on information made available to the public by the vendor and other public sources. No representation is made that this information is accurate or complete. Technology Business Research will not be held liable or responsible for any decisions that are made based on this information. The information contained in this report and all other TBR products is not and should not be construed to be investment advice. TBR does not make any recommendations or provide any advice regarding the value, purchase, sale or retention of securities. This report is copyright-protected and supplied for the sole use of the recipient. Contact Technology Business Research, Inc. for permission to reproduce.