Analysis: Artificial intelligence the new battleground for AWS

• AI, machine learning, advanced analytics to keep cloud leader’s competition at bay
• Microsoft, Google, could challenge by being innovative; more innovation to come

IN A bid to further demarcate the battle lines between the world’s largest cloud behemoths, Amazon Web Services Inc is betting big on artificial intelligence (AI) in the coming years, a strategy that is aimed at extending its already considerable lead in the industry.

At the recently concluded re:Invent 2017 annual conference held at the Sands Convention Centre in Las Vegas in November for customers, partners, analysts and press, the one unequivocal thing on AWS’ chief executive officer (CEO) Andy Jassy’s (pic, above) mind was this: We have always led in the cloud and will continue our leadership through AI and machine learning.

Jassy, who was promoted from senior vice president to CEO of AWS in 2016, said AWS continues to lead the market as an infrastructure-as-a-service (IaaS) player. Citing numbers from research firm Gartner, Jassy said AWS has captured 44% of the cloud market share in 2016, up year-over-year from 39%.

The world’s leading and largest cloud computing player was in a buoyant mood as Jassy set the tone of the conference by thanking all the attendees at re:invent 2017 – some 43,000 people, up 9,000 from last year’s event – for keeping faith with the company and growing its user base further.

“When builders build their applications, and move them to the cloud, they don’t want to settle for a fraction of functionalities [that are available] from a leader. Because customers do realise that having everything is everything,” Jassy argued in his more than two-hour long keynote address at the Sands Convention and Expo.

“And there’s nobody that has the functionality close to what AWS has, as we have the most incredibly robust and diverse fully-featured technology infrastructure services available today.”

AWS by the numbers seems to lead the field where IaaS is concerned due to a confluence of factors. It was the first large vendor to offer cloud as a service and thus had a longer gestation period to grow its business.

Over the years, AWS had thrown all of its parent – Amazon.com Inc’s – mighty resources into AWS to build a successful business, one that now contributes significantly to the bottom line of the group’s earnings.

As a result, the company has grown by leaps and bounds and has “the broadest range of use cases –  from cloud-native startups, to mid-market businesses wanting to lift and shift traditional applications, to enterprises executing transformational migrations to the cloud,” according to Gartner.

But while it has pretty much sewn up the IaaS business thus far, one major nascent area that it ostensibly faces competition in, is AI and machine learning.

This is an area that is gaining momentum. According to McKinsey Global Institute, total investment into the AI sector is growing with companies investing between US$26 billion and US$39 billion globally.

Meanwhile, the research firm estimates that venture capitalists invested US$4 billion to US$5 billion in AI in 2016, and private equity firms invested between US$1 billion and US$3 billion, a figure that is more than three times as much as in 2013.

AWS certainly believes in this and is betting big time on AI’s potential. In 2016, it launched three products that were driven by AI and machine learning, and in 2017 followed up with a slew of products, just recently launched in November.

READ ALSO: AWS launches slew of new services to fend off competition

AWS also aims to bring AI-driven devices such as chatbots into the business realm, when the company brought its hugely popular Alexa virtual assistant, found on Amazon’s Echo devices, to the boardroom via Amazon Alexa for Business.

Foundation for AI

AWS’ bullish sentiment about AI was best captured when Jassy fielded a wide array of questions in a one hour press briefing following his keynote.

When quizzed as to whether AWS had the chops to do AI given that its competitors Microsoft Corp and Google Inc, ostensibly have the best AI and machine learning technology in the industry, Jassy went on an offensive defending AWS’ track record in AI and machine learning.

READ ALSO: AWS seeks to extend its lead amidst competition gains

“When you look at [AI] and machine learning, you need a number of components to be successful, including [the technology being] easy to use so that customers will flock to it.

“But often times, I think that people get too enamoured by AI and machine learning [and the potential it brings] but that in reality those services don’t matter without the right foundation to do machine learning,” Jassy claimed.

AWS’ cloud czar argued that for AI and machine learning to be truly beneficial, it really needs to have a foundation in “the most reliable, secure, most feature-rich data lake,” and AWS has that in its S3 (simple storage service), which is used by the most number of customers in the world.

Additionally, Jassy argued that AI and machine learning need all kinds of security control, and identity management because a lot of that data is going to end up becoming the crown jewels, which is what will help enterprises differentiate themselves from their competitors. 

“The other [cloud] providers don’t come close to the capabilities that AWS has in access control, key management or security compliance capabilities. Additionally, you’ll need to have the right compute power, GPUs, and the broadest array of analytics that no one out there has.

“I think we have collectively what it takes to be successful at [AI] and machine learning with the combination that we have. And we have twice the number customer references who choose us and five times the number of customers using our services,” he claimed.

Next page: When differentiation matters