Amazon Gets Fear and Loathing in Las Vegas
OK, the word “loathing” overstates the case, but Amazon’s prodigious public cloud does inspire fear even among some of the company’s best partners.
With that one sentence Jassy put Citrix Systems (CTXS), VMware (VMW), and Microsoft (MSFT)—all desktop virtualization players—on notice. What was unclear to many is why, with adoption of desktop virtualization still lagging despite all these available options, should AWS get involved?
Amazon’s response to that question was, as it almost always is: customer demand. ”Our most frequent request from large customers has been for a desktop solution,” Adam Selipsky, vice president for marketing, sales, product management, and support, told me. “There’s a big pain point around desktop management—a lot of cost around software, hardware, and administration, and that’s only gotten worse with the proliferation of new devices,” he said.
By offloading all that hardware/software/admin to Amazon’s cloud, IT folks could, in theory, rid themselves of a huge headache. But the aforementioned desktop virtualization players—as well as flash storage startups that cite desktop virtualization as a key driver to adoption—may feel that pain as well if WorkSpaces takes off.
The proliferation of AWS services doesn’t ding just entrenched IT giants—but also the hundreds of small ISV and service partners that have grown up around AWS itself.
Smaller players—many of which offer add-on monitoring, cost assessment, and other tools that fill gaps in the AWS stack, publicly praise the company’s ability to churn out new services continually and cut prices. Privately, they’re sweating out concerns that if their business does well enough, AWS will swoop into their market and take it over, as always citing customer demand.
Redmonk analyst Stephen O’Grady has a great take here on the breadth of Amazon’s ambitions on display at AWS Re:Invent. And, he sees the same similarities I do between AWS and Microsoft of a decade or so ago, when Microsoft “owned” the desktop and a good chunk of the server OS market.
In this respect AWS reminds many—including me—of Microsoft in its heyday—when it owned more than 90 percent the computer desktop and a huge chunk of the server OS market.
“AWS is effectively the juggernaut that Microsoft was, but in a market with—at least theoretically—less protection from lock-in,” O’Grady said via e-mail. “So it follows that they’ll be more aggressive from an innovation standpoint than Microsoft was because they’ll have to be. Hence the 200+ releases per year. That’s how they’ll hope to sustain the momentum.”
Joseph Coyle, North America chief technology officer for Cap Gemini (CAP:FP)—an AWS partner—sees similarities to Microsoft on the surface but also sees one big difference.
“Say what you want about [Amazon CEO] Jeff Bezos but his vision is not at all the same as was Bill Gates. Bezos wins not by squashing as MS did but by not even focusing on the competition and just on the client,” he noted by e-mail.
Of course, skeptics might argue that the whole “we just do what the customer asks” can be a clever way to mask ambitions to crush competitors, but either way, the result is the same.
While many see AWS right now as invincible, it’s helpful to remember that few companies sustain such dominance from era to era. And Amazon’s continued addition of new services carries with it its own risk.
As O’Grady noted:
“The broader and more diverse the business, the more difficult it becomes to manage effectively—not least because you end up making more enemies along the way. It remains to be seen whether or not Amazon’s increasing appetite to cloudify all the things has a similar effect on its ability to execute moving forward, but in the interim customers have a brand new stable of toys to play with.”
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