Analysis: Artificial intelligence the new battleground for AWS: Page 2 of 2

But are we there yet?

The push towards AI and machine learning is not just a natural frontier for AWS but is a clear battle line drawn by the cloud giant. Google in particular has been ramping up its AI and machine learning efforts, while Microsoft is doing the same.

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“AWS is working to offer ‘new age’ application infrastructure in the form of AI to meet the needs of tomorrow’s enterprises in order that they may differentiate themselves from the competition,” said Naveen Chhabra (pic, right), Forrester Research senior analyst for infrastructure and operations.

Naveen said the launch of such devices and services isn’t merely a product launch but it serves to introduce a broad innovation and comprehensiveness into the mix, a feat that is impressive for AWS to do.

But despite the optimism shown by Jassy, and indeed other players such as Google and Microsoft, the actual adoption rates for AI remain low amongst enterprises, with only 20% of AI-aware firms claiming to be early adopters, according to McKinsey’s estimates. Also, 41% of companies aren’t truly certain about the benefits of AI, the firm added.

And in a 2017 McKinsey survey of 3,000 AI-aware C-level executives, across 10 countries and 14 sectors, only 20% said they currently use any AI-related technology at scale or in a core part of their businesses.

Many firms say they are uncertain of the business case or return on investment. A review of more than 160 use cases shows that AI was deployed commercially in only 12% of cases, the firm added.

Asked what he thought about AWS’ foray into the AI game, Naveen said he sees AI and machine learning as ‘weapons of differentiators’ over the next decade, and that all major cloud players are in this race together.

“My own sense is that Google is far ahead of all others,” he argued. “But this does not mean Google has the perpetual edge, as others can catch up.

“AI and machine learning have a huge impact on society but as an industry, I feel that we’re not evolving as fast as we should. I certainly don’t think it is a parity game, and some vendors will do better than others.”

Multi-cloud scenario

While AWS’ foray into to AI and machine learning was a big part of the re:Invent 2017 conference, it was not the only headline that dominated, as Jassy was also quizzed about its multi-cloud strategy. A multi-cloud strategy in theory is supposed to decrease an enterprise’s dependence on one cloud vendor thereby giving it more flexibility of choice and avoiding a single point of failure.

It also allows enterprises to choose which services work best for them, rather than being ‘locked-in’ to only one provider. The concept is similar to the use of best-of-breed applications from multiple developers on a personal computer, rather than the defaults offered by the operating system vendor.

Jassy acknowledged that customers certainly ask a lot about multi-cloud but he argued that while the concept is an interesting one, enterprises which finally drill down seriously on how to deploy the concept do not end up deploying it.

“To implement multi-cloud also means you have to standardise to the lowest common denominator. Other players are nowhere near what AWS can provide, as we have so much functionality and our offerings are much more matured. This means that an enterprise is unlikely to want to handicap their developers with a less capable platform,” he claimed.

Jassy also explained that a multi-cloud deployment means that enterprises will have to ask developers to work with two or more cloud platforms, which is a tough ask. Another disadvantage, he argued, is that by deploying multi-clouds, enterprises stand to lose the volume discounts given by all vendors on the cloud bill.

“Even if multi-cloud sounds interesting and there are a lot of companies who will tell you they use multiple cloud, in practice, companies [would] end up picking a predominant cloud provider,” he claimed.

Gartner research director Alan Waite (pic, above) argued that Jassy would have naturally defended AWS’ position as the dominant cloud player as no one cloud vendor would concede to a multi-cloud play as no player would want to be commoditised.

Speaking to Digital News Asia (DNA) on the sidelines of re:Invent 2017, Waite said that like any other player, AWS would not want its customers to buy different services or functionalities from Google, Microsoft Azure or others.

“It’s a defensive move to act against competition whilst attacking at the same time to take more market share,” he argued. “This is why AWS has to get into AI and machine learning and continue innovating and pushing the envelope with its huge array of services.

“Essentially what AWS is saying is: ‘We have what the competition has so you have fewer reasons to choose others.’ The more value they add, the more services they lock their customers in with.”

Waite however said that this paradigm also means that competitors can and should compete so that customers would have more options.

“So, if you’re Google, and if everyone else is on AWS, Google has to provide a more unique tool you can use as an alternative to AWS. This is how innovation will be pushed.”

Forrester’s Naveen concurred, noting that while AWS’ end goal is to serve and retain its customers, it can’t do everything by itself.

“Even though AWS offers a plethora of services which is growing very rapidly, it does not have endless resources to make itself a one-stop shop for enterprises.

“For instance, Google and Microsoft enjoy a huge client base with their G Suite and Microsoft Office 365 respectively. While these three are competing head to head, they also have their spaces carved out.”

Finally, Naveen suggested that the competitors, in particular Microsoft, is focused on making hybrid cloud a reality via investing in the hybrid stack for enterprise applications.

“It plans to offer the seamless migration and experience regardless of the enterprise app location. In my opinion that will be a strong plus for Microsoft given that AWS is an either or situation as of now.”

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.

Previous re:Invent 2017 installments

Cathay Pacific embraces cloud in digital transformation gig

AWS launches slew of new services to fend off competition

AWS seeks to extend its lead amidst competition gains

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