The annual re:invent conference hosted by Amazon Web Services (AWS) in Las Vegas is notable for the fact that it packs tens of thousands of developers and business partners into a single convention centre. Astonishingly, almost all of the delegates are paying for the privilege of having AWS pitch its products and services to them. If that is a great business model for AWS, then the core message from the event masks an even greater business model.
To put it in perspective, consider these two sentences from the book, Exponential Organizations, by Salim Ismail of the highly respected Singularity University think-tank: “It used to require millions of dollars in servers and software to launch a software company. Thanks to AWS, it now costs just a tiny fraction of that amount.”
The title of the book offers a clue to how cloud services like AWS are transforming businesses and bringing the concept of “disruptive technology” to the centre of new business strategies. At re:invent last week, AWS CEO Andy Jassy used his keynote address to spell out the core role played by cloud services in making global disruption possible.
Stressing that re:invent was not a sales and marketing event, but an educational conference with more than 400 technical sessions, he said that the business made developers – AWS calls them “builders” – feel like super heroes. The reason? It gives them capabilities that allows them to overcome any challenges they try to conquer, and implement any idea they dream up.
“It can feel like you have been given super powers,” he said. With Singularity University saying almost the same thing about AWS, it doesn’t sound entirely like hype.
Jassy outlined what he called the five superpowers that the company’s millions of active customers use to boost their competitive abilities:
1. Supersonic speed.
“Almost always, the number one reason companies move to the cloud is the agility and speed they get from the cloud. What allows them to move fast is having a plethora of infrastructure services at their fingertips. We have over 70 services, and the pace of innovation means we offer new capabilities daily.
To prove his point, Jassy invited on stage Fabio Veronese, head of infrastucture and technical services at Enel, Italy’s main power utility and a world leader in smart meters for energy and water management. These meters are at the heart of another technology revolution, the Internet of Things (IoT), which is seeing a rapid rise in the number of devices sharing data via the Internet.
“The energy world is changing. There is a decoupling between GDP and electricity demand, where you used to see demand rise with GDP. Last year Germany went up 2% in GDP, but went down in electricity consumption, thanks to improved energy management.
“IoT means we will completely transform the energy management model in the next few years. Our strategy was straightforward: go to the cloud as fast as you can.”
2. X-Ray Vision
“We can now offer the ability to see through the handwaving and bombast,” Jassy told a laughing audience. “In the old days, because it was so hard and so expensive to test and experiment for any period of time, you used to get old guard leaders who would make all kinds of wild claims, and you had no ability to know what was real. You had to make a buying decision before you could figure out if it worked. On the cloud, that ship has sailed.”
A range of new artificial intelligence tools were also announced at re:invent to enhance the so-called X-Ray vision: a face matching technology called Rekognition, with can conduct a batch analysis of millions of images in real time; a text-to-speech recognition service called Polly, which translates text and outputs it as audio, with 47 different voices in 27 languages; and LEX, which lets computer systems ranging from pizza ordering to appliance controls understand natural language questions and instructions.
Jassy quickly addressed the sceptical looks when he suggested immortality as a new superpower.
“This generation is the first that can live substantially longer, and that is very pertinent to businesses, as it’s very hard in business to persist for a very long time. Only 12% of the first Fortune 500 from 1955 is still in the Fortune 500.
“If you want a chance to live forever in business, its clear you have to take advantage of evolving technology trends and changes. You see that with startups who have build incredible businesses, breathing new life onto virtually every industry, from accommodation to shaving. Every single one is able to leverage the flexibility and power and cost of cloud.”
Even traditional businesses like McDonald’s are embracing this new normal. It is presently moving its entire Point-of-Sale system, comprising 200 000 cash registers and 300 000 devices in restaurants across the globe, into the cloud.
“Many of us have the yearning to have the freedom to fly. For builders, the same yearning for freedom exists, to build faster, to use your data better, to unshackle from customer-hostile database providers.”
He pointed out that commercial-grade database providers were not only very expensive, but locked customers in with punitive licensing terms. As a result, builders were moving their databases to open source engines as fast as they could.
AwS has built a platform called Aurora to offer them the same speed and availability as commercial databases, but with cost effectiveness of open source. The most startling comment of the day was that Netflix, the global leader in video-on-demand services, had moved its entire service over to this platform.
5. Shape Shifting
The freedom of cloud choice has long been a sticking point for business users, who sometimes had to select between keeping everything on premise or moving it all into the cloud. The hybrid cloud evolved to address this need.
“You don’t have to choose between on-premise and the cloud,” Jassy insisted. “We want them to be able to operate their on-premise services as seamlessly as possible on AWS. As a result, AWS recently entered a partnership with cloud software leaders VMware to offer a service called VMware Cloud on AWS, addressing this need.
When VMware CEO Pat Gelsinger joined Jassy on stage to discuss how companies ranging from Amadeus to Zynga were using the service, it was the coming together of two of the biggest names in the business. The ability to achieve that team-up was probably AWS’s biggest superpower of all.