AWS seeks to extend its lead amidst competition gains

• Still the cloud player to catch but expect more features introduced to keep its lead
• Multi-cloud scenario beginning to present opportunities for competition

CLOUD giant Amazon Web Services (AWS) Inc’s yearly conference, re:Invent 2017, is beginning today (Nov 29) and the company is set to announce a slew of new products, services and customer wins, which is designed to extend its dominance in the cloud game yet again.

The sixth iteration of its annual conference held at the Sands Convention and Expo in Las Vegas this week is expected to host some 40,000 participants comprising developers, customers, partners, analysts and media, up 8,000 from last year.

The worldwide leader in public cloud infrastructure-as-a-service (IaaS) is expected to introduce features not only in its stronghold of cloud IaaS but is also anticipated to make new announcements on artificial intelligence (AI) and the Internet of Things (IoT), according to several industry observers. It is also expected to announce new customer wins.

While this move is pretty much expected of any leading vendor at its annual conferences, AWS is anxious to push its technologies harder this time around as nearest competitors Microsoft Corp and Google Inc haven’t been resting on their laurels either, and are ramping up their customer wins and cloud features too.

For now, AWS is not under threat yet and is still widely considered the undisputed king in the public cloud computing market despite intensifying competition from Microsoft, Google and Chinese player, Alibaba Group Holding Ltd’s Alibaba Cloud, according to the latest cloud tracking figures from Synergy Research.

Its chief analyst John Dinsdale said he expects the total market growth to be pegged at around 40%, and noted that Amazon remains bigger in market size than its next five largest competitors combined and is still managing to nudge overall growth, although the growth percentage is smaller than its competitors.

“While we forecast 40% growth in the total market for 2017, there’s still something a little shocking about seeing a business unit the size of AWS consistently growing its revenues by over 40%,” said Dinsdale.

He also credits Microsoft and Google with achieving credible growth rates, as the second and fourth largest player, while old stalwart IBM Corp comes in as the third, thanks primarily to its strong leadership in hosted private cloud services.

Rounding out the top eight cloud providers, Oracle Corp continues to grow strongly, albeit from a small base, while Salesforce.com Inc and Rackspace Inc maintain a strong position in specific niche segments of the market, Dinsdale said.

Still leading but defending turf

AWS has been steadily moving from just a bare-bones IaaS provider towards a more traditional enterprise cloud player for all sizes of the market. In its early days, it was a favourite of early adopters such as startups, which usually do not have legacy IT infrastructure and software, to grapple with.

Its pay-as-you-go model also sit well with companies that do not require their own infrastructure to host their software apps, which is perfect for startups. But over the past five years, AWS has grown into not only a firm favourite for startups but is also being taken very seriously by larger, more mainstream enterprises as well.

At last year’s conference, AWS sought to keep its ‘cloud king’ crown by shoring up its ability to serve these kinds of big multinationals-cum-large companies, while keeping the innovation going with new feature sets.

The impetus is simple and clear as day; as Synergy Research’s Dinsdale noted, its competitors Microsoft and Google, and to a lesser extent Alibaba Cloud are ramping up their own offerings.

The first battle lines have been drawn in the area of pricing. Just in September, AWS announced its intention to implement per-second billing by Oct 2, but the move was pre-empted by Google on Sept 27, when it too said it would bill per-second, but effective immediately. Both Google and Microsoft have offered per-minute pricing for their competing services since 2013 while AWS did it on a per-hour basis.

From a features point of view, AWS showcased its AI and machine learning capabilities last year dubbed Amazon Rekognition, which makes it easy to add image analysis to applications, using powerful deep learning-based image and face recognition; Amazon Polly, which transforms text into life-like speech, enabling apps to talk with life-like voices; and Amazon Lex, which enables any developer to build rich, conversational user experiences for web, mobile, and connected device apps.

But this year, Google introduced its portfolio of AI and machine learning tools such as its Cloud Machine Learning Engine, a platform designed for companies with data scientists and machine learning experts who are able to build their own unique machine learning models; video Intelligence API, which showcased how it could easily comb through hours of video footage and pick out, say a dog in a video, marking when and where it happened, by seeking to understand the context of the search.

It also demonstrated its Data Loss Protection (DLP) API (application programming interface), the software, which helps users minimise what data they collect, expose or copy.

And on its part, Microsoft recently introduced a new set of tools dubbed Azure Machine Learning Tools at its annual conference Microsoft Ignite in Orlando in September. Its chief executive officer (CEO) Satya Nadella later said in an interview in November that he wants the Redmond, Washington-based company to become a company that is “going to democratise access to new technology, [including AI].”

“Whether it’s speech, vision, text, natural language or the ability to build bots, all of that is capability that we are just making available to every developer so they can — whether it be a bank, an energy company or a retailer — really transform their business processes with AI,” he was quoted as saying.

Meanwhile China’s Alibaba and two other powerhouses, Baidu Inc and Tencent Holdings Ltd, aren’t sitting still either. They’re pouring serious money into AI and machine learning in a bid to catch up to their US counterparts.

Although AWS is still the worldwide leader today in terms of sheer size, the game’s afoot as even its CEO Andy Jassy (pic, above) conceded that competition is ramping up.

“There won’t be just one successful player. There won’t be 30 because scale really matters here in regards to cost structure, as well as the breadth of services.

“But there are going to be multiple successful players, and who those are I think is still to be written. But I would expect several of the older guard players to have businesses here as they have large installed enterprise customer bases and a large sales force and things of that sort,” he had recently said.

Next page: Heightened competition