AWS' portfolio evolution and business model expansion will drive continued high growth and enterprise adoption
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
Las Vegas, Nov. 12–15, 2013
Jillian Mirandi (firstname.lastname@example.org), 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
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
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.
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