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> What if cloud vendors focus on the lowest layer, and other (pure software) vendors on the layer above? I'm at AWS re:Invent this week and I can tell you this

> What if cloud vendors focus on the lowest layer, and other (pure software) vendors on the layer above? I'm at AWS re:Invent this week and I can tell you this absolutely not what Amazon is doing. Two themes really stand out in the keynotes and associated presentations: 1.) Becoming a home for data and ML services backed by hardware technologies like Graviton, Trainium, and stupid fast network connectivity. Amazon has dozens of value-added services from S3 to analytic databases. By my count they have at least 16 managed data services. 2.) Extend Amazon cloud wherever possible into non-cloud environments. Specifically: push to on-prem through technologies like AWS Outposts and Container Marketplace Anywhere as well as integrate with IoT. #2 looks like a pump fake to defuse customer lock-in concerns. The real play is #1, which is to become the preferred home for data, taking the maximum possible share of revenue in the market. Taken as a whole, Amazon has the best data story of any company I know of.

WaxProlix 5y ago
I worked at AWS Systems Manager, which has a hybrid on-prem solution that lets you integrate non-aws resources into the IAM/HOSM world (sometimes just called Managed Instances). There was a bit of pushback internally around what kind of play we were allowed to make in the on-prem/hybrid space, and eventually the product just got KTLO'd. Kind of a shame, it was neat.
- noduerme 5y ago
  This seems prophetic. I'd be really curious what you could do with that kind of "Managed Instance" and why it was killed.
  - WaxProlix 5y ago
    It wasn't killed, the feature just never got the kind of marketing and traction that we felt it could/should have. IAM went off and built their own blessed version later, I think.
simonh 5y ago
I don't think the contention is that they will give up on these services, or publicly acknowledge that this is happening. A lot of AWS customers will be very happy with the native vendor services, it's just that the premium and corporate end of the market will go with more sophisticated ISV services. Also this is a forward looking prediction, it's happening in certain segments now, and will become prevalent in other segments over time. That's the claim anyway. Take Elasticsearch for example, AWS is offering a clone service, but if you want the best Elasticsearch experience on the latest code base maybe you're better off using Elastic's own Elastic Cloud service that's also within AWS. If things play out as Erik predicts (and Elastic doesn't screw up) they should do just fine. We'll see if that's how it plays out.
- dudeinjapan 5y ago
  Elasticsearch's cloud offering is a hot mess, didn't have a lot of confidence in how it was provisioned. We did a bake-off between ES Cloud, AWS Opensearch, and hosting our own cluster on AWS and the winner was... hosting our own (all things being equal we'd much rather go PaaS.) AWS Opensearch would have won out had it supported plugins which I understand they are working on.
speeder 5y ago
Almost unrelated question... Did you used the maps at the conference? Did you liked them? (I work for the company that made the maps and I am wondering how people that are not us, and not the executives that chose us, think about us)
- hodgesrm 5y ago
  That's a great question. I did use the map built into the re:Invent app and it's really handy. That said, it helps enormously to have been there before. Even a single venue like the Venetian is enormous and requires some practice to get from A to B quickly within the building. The re:Invent team has guides standing around to give directions, which also really helps.
_dark_matter_ 5y ago
Best data story? They are sorely lacking a strong distributed database offering. Athena is slow and hard to optimize, and redshift does not hyperscale - that's why everyone switched to snowflake. These are the fundamentals of a data function at any company. GCP has bigquery, such itself serves enough use that companies could consider leaving AWS.
- lbhdc 5y ago
  The company I work for uses GCP primarily for bigquery. The rest of compute followed so we didn't have to pay all of the networking fees to use aws.
- hodgesrm 5y ago
  Redshift pulls down $100s of millions in annual revenue as far as I can tell. Not everyone is switching.
- dustinmoris 5y ago
  Agreed. BigQuery, Cloud Spanner and Firebase are unique products which no other cloud provider can match even in the slightest. I think these things are a pull factor into GCP and everything else can be easily replaced once people decided to just move everything into GCP. I got sucked into GCP because GKE is (still) much more advanced than EKS or AKS and that alone was a pull factor for me, let alone the other services which I mentioned.
  - jbergens 5y ago
    From someone not used to GCP Cloud Spanner and Big Query sounds like great products but the general trend seems to be to go with AWS or Azure. Maybe their solutions are good enough. We have started to use CosmosDb and it scales enough for us.
  - mhoad 5y ago
    I don’t actually know that much about the AWS ecosystem at all but to me from the outside I wouldn’t even consider doing anything greenfield there they already seem so far behind in terms of offerings some of which you touched on there but the actual list is much longer AFAIK. Does anyone who’s less ignorant than me want to give me a run down of why AWS holds so much appeal? Is it purely non technical reasons? Are they doing a much better job than GCP in areas I just am not aware about? I ask as a genuine question to learn more despite how it may read…
cinntaile 5y ago
#1 is Nvidias play as well, no? More the hardware side rather than the data side of course.
mdasen 5y ago
I think AWS knows that the best it can do is offer so much combined value that people don't want to leave the ecosystem. It's the same play that Amazon has used for Prime. If Prime were just shopping, people could leave Prime for Walmart+ or Target/Shipt. Instead, Prime is a service that keeps lots of touch points. You essentially get a free streaming service in Prime Video (included with your retail shipping thing) or you get a free shipping service (included with your video streaming); you get some perks on Twitch; you get a music streaming service that doesn't include all music, but has a lot for free (with no ads) and the potential for Music Unlimited for 20% less than Spotify/Apple Music. If you can get the same value from another ecosystem, you might leave for a better price. If you can't get the same value from another ecosystem, you won't leave. If you're locked into proprietary AWS systems, it might require a lot of work to migrate. I do get where the author is coming from with RedShift and Snowflake. I think it's reasonable to look at AWS's data warehouse position and Snowflake's success and see a bit of a failure on AWS's part. However, I think that Snowflake represents a threat to AWS. If all services above the infrastructure became like Snowflake, I could more easily move from AWS to GCP or Azure. I'd note that it isn't just about companies who will switch cloud providers. It's about whether a company can credibly threaten that they might switch cloud providers. If I'm negotiating with AWS and they see that I'm using SQS, Lambda, RedShift, Timestream, Kenesis, and other proprietary AWS stuff, they know that my threat to leave AWS is hollow. I'd have to rewrite too much infrastructure. Sure, maybe I could replace SQS with Kafka, but it isn't a drop-in replacement. Sure, there are other time-series databases than Timestream, but it's going to require engineering time to migrate. Yes, even in a world where all the software is the same on top of the infrastructure, it would take time and money to migrate to a different cloud, but it would be less time and money. That "less time and money" means that AWS needs to be more price competitive and it gives me more negotiating power. The harder it is to leave AWS, the more leverage that Amazon has in negotiations. Companies like Spotify and Snap spend hundreds of millions on their cloud services each year. They ink major deals that they negotiate. If they rely on lots of proprietary AWS or GCP systems, it makes it a lot harder to leave - which leave the cloud provider with the leverage when the contract comes up for renewal.
- tatersolid 5y ago
  > I think AWS knows that the best it can do is offer so much combined value that people don't want to leave the ecosystem. This is exactly the Microsoft playbook.
sofard 5y ago
Not to mention, as the author mentioned, there's a (likely) scenario that pure cloud providers become a low-margin commodity. We've already seen this play out. Even with lock-in, to attract new customers, you'll be competing mostly on price.
- abnerg 5y ago
  +1 Amazon has always been a "lower margin" business. One argument for why and how AWS beat all the tech vendors to the punch was that everyone else had businesses build on higher margins (Google, MSFT, Oracle, VMware, etc). Now that AWS delivers most of Amazon's current profit, it will be interesting to see if Jassy asks for more margin out of them or tries to find it in other parts of the business.
ramoz 5y ago
I agree. Cloud being a commodity is already prevalent. CSPs are cut throat beyond that, and bleeding into the integration space more than ever before. Data/ML is a key entry point today.

WaxProlix 5y ago

I worked at AWS Systems Manager, which has a hybrid on-prem solution that lets you integrate non-aws resources into the IAM/HOSM world (sometimes just called Managed Instances). There was a bit of pushback internally around what kind of play we were allowed to make in the on-prem/hybrid space, and eventually the product just got KTLO'd. Kind of a shame, it was neat.

noduerme 5y ago
This seems prophetic. I'd be really curious what you could do with that kind of "Managed Instance" and why it was killed.
- WaxProlix 5y ago
  It wasn't killed, the feature just never got the kind of marketing and traction that we felt it could/should have. IAM went off and built their own blessed version later, I think.

simonh 5y ago

I don't think the contention is that they will give up on these services, or publicly acknowledge that this is happening. A lot of AWS customers will be very happy with the native vendor services, it's just that the premium and corporate end of the market will go with more sophisticated ISV services. Also this is a forward looking prediction, it's happening in certain segments now, and will become prevalent in other segments over time. That's the claim anyway. Take Elasticsearch for example, AWS is offering a clone service, but if you want the best Elasticsearch experience on the latest code base maybe you're better off using Elastic's own Elastic Cloud service that's also within AWS. If things play out as Erik predicts (and Elastic doesn't screw up) they should do just fine. We'll see if that's how it plays out.

dudeinjapan 5y ago
Elasticsearch's cloud offering is a hot mess, didn't have a lot of confidence in how it was provisioned. We did a bake-off between ES Cloud, AWS Opensearch, and hosting our own cluster on AWS and the winner was... hosting our own (all things being equal we'd much rather go PaaS.) AWS Opensearch would have won out had it supported plugins which I understand they are working on.

speeder 5y ago

Almost unrelated question... Did you used the maps at the conference? Did you liked them? (I work for the company that made the maps and I am wondering how people that are not us, and not the executives that chose us, think about us)

hodgesrm 5y ago
That's a great question. I did use the map built into the re:Invent app and it's really handy. That said, it helps enormously to have been there before. Even a single venue like the Venetian is enormous and requires some practice to get from A to B quickly within the building. The re:Invent team has guides standing around to give directions, which also really helps.

_dark_matter_ 5y ago

Best data story? They are sorely lacking a strong distributed database offering. Athena is slow and hard to optimize, and redshift does not hyperscale - that's why everyone switched to snowflake. These are the fundamentals of a data function at any company. GCP has bigquery, such itself serves enough use that companies could consider leaving AWS.

lbhdc 5y ago
The company I work for uses GCP primarily for bigquery. The rest of compute followed so we didn't have to pay all of the networking fees to use aws.
hodgesrm 5y ago
Redshift pulls down $100s of millions in annual revenue as far as I can tell. Not everyone is switching.
dustinmoris 5y ago
Agreed. BigQuery, Cloud Spanner and Firebase are unique products which no other cloud provider can match even in the slightest. I think these things are a pull factor into GCP and everything else can be easily replaced once people decided to just move everything into GCP. I got sucked into GCP because GKE is (still) much more advanced than EKS or AKS and that alone was a pull factor for me, let alone the other services which I mentioned.
- jbergens 5y ago
  From someone not used to GCP Cloud Spanner and Big Query sounds like great products but the general trend seems to be to go with AWS or Azure. Maybe their solutions are good enough. We have started to use CosmosDb and it scales enough for us.
- mhoad 5y ago
  I don’t actually know that much about the AWS ecosystem at all but to me from the outside I wouldn’t even consider doing anything greenfield there they already seem so far behind in terms of offerings some of which you touched on there but the actual list is much longer AFAIK. Does anyone who’s less ignorant than me want to give me a run down of why AWS holds so much appeal? Is it purely non technical reasons? Are they doing a much better job than GCP in areas I just am not aware about? I ask as a genuine question to learn more despite how it may read…

cinntaile 5y ago

#1 is Nvidias play as well, no? More the hardware side rather than the data side of course.

mdasen 5y ago

I think AWS knows that the best it can do is offer so much combined value that people don't want to leave the ecosystem. It's the same play that Amazon has used for Prime. If Prime were just shopping, people could leave Prime for Walmart+ or Target/Shipt. Instead, Prime is a service that keeps lots of touch points. You essentially get a free streaming service in Prime Video (included with your retail shipping thing) or you get a free shipping service (included with your video streaming); you get some perks on Twitch; you get a music streaming service that doesn't include all music, but has a lot for free (with no ads) and the potential for Music Unlimited for 20% less than Spotify/Apple Music. If you can get the same value from another ecosystem, you might leave for a better price. If you can't get the same value from another ecosystem, you won't leave. If you're locked into proprietary AWS systems, it might require a lot of work to migrate. I do get where the author is coming from with RedShift and Snowflake. I think it's reasonable to look at AWS's data warehouse position and Snowflake's success and see a bit of a failure on AWS's part. However, I think that Snowflake represents a threat to AWS. If all services above the infrastructure became like Snowflake, I could more easily move from AWS to GCP or Azure. I'd note that it isn't just about companies who will switch cloud providers. It's about whether a company can credibly threaten that they might switch cloud providers. If I'm negotiating with AWS and they see that I'm using SQS, Lambda, RedShift, Timestream, Kenesis, and other proprietary AWS stuff, they know that my threat to leave AWS is hollow. I'd have to rewrite too much infrastructure. Sure, maybe I could replace SQS with Kafka, but it isn't a drop-in replacement. Sure, there are other time-series databases than Timestream, but it's going to require engineering time to migrate. Yes, even in a world where all the software is the same on top of the infrastructure, it would take time and money to migrate to a different cloud, but it would be less time and money. That "less time and money" means that AWS needs to be more price competitive and it gives me more negotiating power. The harder it is to leave AWS, the more leverage that Amazon has in negotiations. Companies like Spotify and Snap spend hundreds of millions on their cloud services each year. They ink major deals that they negotiate. If they rely on lots of proprietary AWS or GCP systems, it makes it a lot harder to leave - which leave the cloud provider with the leverage when the contract comes up for renewal.

tatersolid 5y ago
> I think AWS knows that the best it can do is offer so much combined value that people don't want to leave the ecosystem. This is exactly the Microsoft playbook.

sofard 5y ago

Not to mention, as the author mentioned, there's a (likely) scenario that pure cloud providers become a low-margin commodity. We've already seen this play out. Even with lock-in, to attract new customers, you'll be competing mostly on price.

abnerg 5y ago
+1 Amazon has always been a "lower margin" business. One argument for why and how AWS beat all the tech vendors to the punch was that everyone else had businesses build on higher margins (Google, MSFT, Oracle, VMware, etc). Now that AWS delivers most of Amazon's current profit, it will be interesting to see if Jassy asks for more margin out of them or tries to find it in other parts of the business.

ramoz 5y ago

I agree. Cloud being a commodity is already prevalent. CSPs are cut throat beyond that, and bleeding into the integration space more than ever before. Data/ML is a key entry point today.