AWS seeks to extend its lead amidst competition gains: Page 2 of 2

Competitive scenarios

Besides competition in AI and machine learning, AWS is also expected to face increasing competition from customers who may want to implement a multi-cloud strategy. There are varying reasons for this but the three most common ones are: to avoid competition; to meet specific needs based on best-of-breed feature sets; and to serve companies that have existing legacy infrastructure with their default vendor of choice.

The first scenario is the most well known. After all, why would a company like Wal-Mart Stores Inc, which runs retail giant Walmart, want to finance AWS given that its parent, Amazon.com Inc, competes directly with it?

In fact, such is the animosity between Amazon and Walmart that the latter is reportedly telling its developers and technology suppliers it works with in June this year to avoid using AWS as a cloud provider and instead choose other neutral competitors, a story first reported by The Wall Street Journal (registration required).

And when Amazon completed its buyout of grocer Whole Foods Markets Inc in August, competing retailer Target Corp did the same by announcing that it will scale back on its usage of AWS’ cloud services, reports CNBC.

This scenario isn’t just a US phenomenon but is global in nature. Other companies wary of AWS’ parent’s retail connection include India’s retailing giant Flipkart Ltd, which in February signed with rival Microsoft for use of its Azure public cloud service.

This isn’t surprising as earlier in the year, Flipkart received a boost of US$3.9 billion in two funding rounds, from SoftBank Group Corp, Tencent and Microsoft – all rivals of Amazon and AWS.

The second scenario comprises companies who chose a cloud vendor based on their specific needs not just because AWS is the largest, most popular choice. A US-based example of this is marketing software player Marketo Inc, who recently chose Google Cloud over AWS and will move new and existing customers to the latter in the course of 2018.

Speaking to Fortune, Marketo CEO Steve Lucas said, “There is a very obvious affinity between Google and marketers. Google is one of the top three to five companies for chief marketing officers, full stop.”

Other examples are Singapore-based online classified marketplace startup Carousell Pte Ltd (pic, above), which chose Google Cloud instead of AWS after much deliberation, as well as British-based cosmetic company Lush Ltd, which also went with Google for a variety of reasons, as well as a dispute it has with AWS’ parent. Ditto for analytics company Mixpanel, which turned to Google recently.

Thirdly, some companies are just too invested in legacy technology and would prefer to migrate to a cloud player that can extend their existing infrastructure readily instead of migrating to a new provider.

This last category typically favours Microsoft as some have argued that the company is still able to leverage on its huge customer base of existing enterprise customers. This includes customers who are already using or prefer using its software stack rather than going with another cloud provider. These customers also typically have existing good business relationships with Microsoft.

Examples of these include, the world’s largest shipping firm, Maersk Group, which in April turned to Microsoft for its digital transformation efforts. So did consumer goods giant Mars Inc, who started out with Office 365, only to end up running mission critical apps on Azure Cloud.

Microsoft’s isn’t finished courting other customers too, as the giant has a huge pedigree in establishing enterprise wins, and has recently launched a broadside on AWS by introducing a free tool called Azure Migrate. The aim of the tool is to make it easy for customers to bring their existing applications and data from their own servers up into the Microsoft Azure cloud, reports Business Insider.

Surprises to come?

As the cloud wars carry on, you can certainly count on AWS’ Jassy to make some significant announcement this week as well as bring on stage some big-name customers to endorse AWS’ offerings.

Already, CNBC reported early this week, citing confidential sources, that AWS is set to announce a huge healthcare deal with Cerner in a bid to bolster its customer win in the healthcare sector. The US business broadcasting network also speculated on a range of features that it says AWS will make known during re:Invent 2017.

And earlier this month, AWS made some smaller pre-announcements, such as its AI consultancy services and highly classified data centre region targeted at the US intelligence community and other government agencies working with secret-level datasets, reports ZDNet.

Gartner research director Alan Waite expects this year’s conference to announce features that will enable AWS to defend its turf in the wake of increasing competition.

“There will be more announcements around the width and breadth of the features sets that it already has, and the number of new services it will introduce will be significant,” he told Digital New Asia (DNA). “This is designed to demonstrate its ambition to stay ahead of the rest of the field and extend its lead.”

Edwin Yapp reports from the AWS re:Invent 2017 in Las Vegas at the invitation of Amazon Web Services Inc. All editorials are independent. He is contributing editor to Digital News Asia and an executive consultant at Tech Research Asia, an advisory firm that translates technology into business outcomes for executives in Asia Pacific.

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