What’s going on at Amazon Web Services these days? What’s with the new CEO? What will we hear at re:Invent this year?
I get these questions a lot these days, so recently I sat down with AWS CEO Adam Selipsky at his office in Seattle to talk about its business, his vision, the new focus, new announcements and, as I’ve done with Amazon leadership for each of the past 10 years, what story will be at re:Invent, the company’s annual user conference that kicks off next week.
Compared with last year, Selipsky’s first year as CEO, he’s much further along in his command for the portfolio and deep into execution mode, product development, customer conversations and a personnel reshuffle all while riding what remains the biggest growth company in technology. He’s running an $82 billion annual revenue run rate business that’s now entering its next chapter in cloud, far beyond the compute and storage infrastructure that built it. I call it the next-gen cloud.
The Amazon.com Inc. the parent unit is similarly beginning a new chapter in its growth, one where there’s a need for more than just new technology. Now it’s about business transformation using that technology.
The first big chapter at AWS was led by Andy Jassy, now CEO of Amazon overall, who took on traditional, on-premises IT and invented cloud computing. With a strong product focus, he delivered core infrastructure building blocks and inspired his teams to innovate, often announcing well over a hundred new services and capabilities each year at re:Invent. Cloud computing is changing faster than ever thanks to continued data growth, advances in open source, and relentless silicon and compute instance technology advancements.
In short, more data, more code and more horsepower helped AWS become a global economic force for a new era in cloud computing. All that was a smashing success, one that SiliconANGLE, Wikibon, and theCUBE have covered for over a decade.
So AWS already reinvented IT. Now its challenge is to help customers transform their businesses by becoming a foundation for independent software vendors, and new cloud-native platforms that promise to simplify application development, operational data across the enterprise, and deliver industry-specific solutions.
Selipsky illuminates this recent customer focus on business transformation. “The biggest thing that I’ve seen in the past year and a half is that most often CEOs and CIOs want to speak with me on topics around transformation not around technology,” he says.
This won’t be easy, even for what remains the clear leader in cloud computing. The industry is changing rapidly and AWS’ agility will be tested. There is demand for next-generation cloud capabilities from startups to large companies looking to change how they do business.
“The modern data stack is being re-imagined once again with cloud data stores like S3, Snowflake and Databricks becoming more of a platform layer that application companies build on,” says Matt McIlwain, founding partner at Madrona Venture Group and an original investor in Amazon. “While AWS and others will continue to offer substantive advances in the modern data stack, transformation will come from AWS and third-party applications that leverage foundation models and AI to disrupt legacy software sectors. And, more specifically, there will be a need for industry-focused solutions.”
Adam Selipsky: the solutions CEO
Unlike Andy Jassy, AWS CEO Adam Selipsky isn’t a career Amazonian. After spending 11 years during the early days helping launch AWS as Vice President of Marketing, Sales and Support, Adam took a few years off to get CEO experience at a smaller growth company, Tableau Software Inc., where he led their move to the cloud and helped drive its breakout success and ultimate sale to Salesforce Inc. Before AWS, Adam served at RealNetworks. He has a long history in the industry, honing his experience through recessions, downturns, acquisitions, industry transformations and long periods of rapid growth. Jassy clearly trusts him, and so do AWS customers. Since he’s “been there, done that,” Adam is in a perfect position to help customers on their business transformation journeys.
He brings a solution-oriented focus to customers who need to ramp up their cloud capabilities for business transformation. Basically they need to learn how to apply technology to survive, grow and succeed at a time of significant macroeconomic challenges, and it’s Selipsky’s job to make sure AWS can help them do it.
I expect the cadence of AWS innovation to be the same on the infrastructure and service side of the business, but the emerging game under Selipsky will be specialized solutions marketed to new customers’ need for business transformation, not just the amorphous term digital transformation.
“Digital transformation is moving to the cloud which is driving organizational change and people are saying, ‘Hey, how should I organize my company? And I can see my culture changing, how do I proactively shape that?’” Selipsky told me. “But the business transformation potential of the cloud is to make organizations faster, more risk-taking, more innovative. That’s what I meant by business transformation of the organization.”
Re:invent 2022: data cloud + intelligent apps + solutions
One theme this year at re:Invent will be keeping up the momentum on the classic AWS cloud plan: faster, high-performance infrastructure, extensible platform as a service, and robust ecosystem of partners. AWS’ emerging focus continues to be around next-gen intelligent applications, specialized industry solutions and a modern data cloud.
That could catapult AWS into the next stage of cloud computing, but it will have to contend – or co-exist with – partners and customers that are trying to build their next-generation cloud platforms atop AWS. And it will have to build some new business models, integration approaches and apply broader strategy to take advantage of the opportunity.
A tale of two AWS clouds: Classic + Next Gen
As AWS is expanding and growing up, so is its ecosystem and customer base. We continue to report the growth of companies moving to the cloud, moving their workloads etc. Recently, we’ve been documenting the rise of experienced technologists and companies doing more advanced development up and down the AWS stack. Additionally, we’ve been seeing more demand for solutions where companies might have skills gaps or need for turnkey solutions for fast deployment of new modern applications.
“AWS classic” is my term for the AWS that we all know and love: its infrastructure-as-a-service and platform-as-a-service cloud. That includes powering workloads with operationally sound foundational infrastructure building blocks, or as Adam Selipsky calls it, “primitives,” for its enterprise customers, software-as-a-service marketplace of solutions and ecosystem of partners.
Some of AWS’ enterprise customers, such as Goldman Sachs & Co. with its Financial Services Data Cloud, are uniquely qualified to build tailored cloud-powered software on AWS and offer these solutions to other financial institutions. Selipsky calls all of the companies building on top of AWS and selling applications as SaaS offerings ecosystem independent software vendors. Selipsky points out the distinction between what is a cloud or a cloud app, and it gets to what could be considered shortsightedness or a potential conflict with those customers.
“Goldman on top of AWS is an ISV,” Selipsky insists. “It’s a SaaS offering. We’re the cloud.”
Given the distinction between ISV and “true cloud,” I pressed Selipsky more on this notion that something big is going on with these large partners and customers, which are building more than simply classic SaaS applications. After all, to the companies buying these solutions, it’s just a cloud, an application that they need to help transform their businesses. They aren’t searching the web for an AWS ISV. They are likely searching for some form of “cloud financial solutions,” for example, in the case of Goldman Sachs’ offering.
I call this AWS Next-Gen.
Companies are looking at the new higher-level services now available and more coming this re:Invent to figure out how to invent new applications – but not just the same old applications. In particular, we are seeing applications become full platforms or clouds themselves running on top of AWS as the cloud infrastructure. This is a good thing, for AWS and for organizations globally.
One example of this next-gen cloud is AWS partner Databricks Inc. It’s famous in cloud circles for starting its company on AWS with little more than a credit card and growing it to a multibillion-dollar business.
“In 2013 I swiped my personal credit card on AWS and some of my co-founders did the same,” CEO Ali Ghodsi told me. “And we started building. And we were excited because we just thought this is a much better way to launch a company because you can just get much faster time to market and launch your thing, and you can get the end users much quicker access to the thing you’re building.”
Databricks has evolved from an ISV to a full-blown platform that has its own ISV ecosystem. This is a new pattern emerging from AWS partners and their customers.
“We’re a data platform,” Ghodsi said, not just an ISV. “We have a whole slew of ISVs on top of Databricks, that integrate with our platform on top of AWS. And today it’s an amazing partnership with multiple offerings on their marketplace and a native offering on AWS.”
We at SiliconANGLE and theCUBE have been calling this trend the rise of the supercloud. Although Selipsky doesn’t use that term, it’s something he does sees happening on AWS.
“I would say that we continue to see just deeper and broader adoption inside of individual customers,” he says. “They are getting more sophisticated about the way that they move those applications and setting up landing zones and then some of our more technically sophisticated customers saying, ‘Hey, we have capabilities which we could externalize.’”
In essence, we’re seeing AWS become the source of other clouds. It’s a new reality around the rise of superclouds, which are delivering a new set of capabilities to enable the best technical or business minds to spin up full platforms, not just SaaS applications. Moreover, businesses that don’t have the platform engineering talent or skills to use AWS’ higher-level solutions for fast deployment of modern SaaS applications can leverage these specialized solutions.
This new cloud approach is a next-level experience – deeper integration with cloud services, more agile software and application development, and finally more impact around the role of data.
AWS data cloud
One area that is ripe for reinvention, even in its relative infancy, is machine learning and artificial intelligence, both driven by massive amounts of data.
Data has always been talked about as the key to unlocking value for business. AWS sees its broad capabilities around data having a more end-to-end view to help customers manage data. When pressed on the company’s focus, Selipsky talks about the impact data has on the changing roles inside companies.
“Data is moving from departments and topics to being intrinsic parts of how businesses function… moving into lines of business, into applications, intrinsically into things that companies deliver to their end users,” he says. “We see so many more organizations now moving toward actually putting data at the center of their decision-making.”
Even with this new data disruption and innovation – or because of it – Selipsky believes that the role of a data analyst eventually goes away. Instead, all employees become data analysts in their day-to-day jobs. “Data expertise and the use of data will permeate all parts of a company and we’ll stop talking about people who have the word analyst in their title,” he says. “Rather, we’ll have hundreds of millions of people who analyze data as part of their day-to-day jobs.”
According to Selipsky, “customers really need to be able to take an end-to-end integrated view of the entire journey that their data goes on from ingestion to storage, to harmonizing the data, to being able to query it, to being able to do business intelligence and human based analysis on it, to being able to collaborate and share on that data.”
MongoDB Inc. CEO Dev Ittycheria agrees. “I have to give kudos to AWS for being very customer obsessed and innovative, now with something like over 300 services,” he says. “But what we have found from talking to our customers is that in some ways, the onus is on the customer to figure out which building block to use to be able to stitch together the applications and solutions they want to build. Over time, the tax and cost of learning, managing and supporting those different applications just doesn’t make a lot of sense or just becomes cost- prohibitive.”
With MongoDB, he added, “we’ve taken an opinionated point of view and said, ‘We will enable you to do that using one data model.’ The document model is a breakthrough way to work with data and easy for developers who are building these modern applications, and it’s highly scalable and performant in a way that no other platform offers. Offering one data model, one elegant user experience, one way to address the broadest set of use cases is a better way. But clearly customers have a choice.”
Data acceleration continues as data has never been created faster in the world than right now. Every year we hear about data tsunami and data growth still keeps coming. According to Selipsky, it’s a problem and an opportunity. “Companies who are unable to generate insight from their data because there’s just too much of it [have] huge opportunities to transform [their] entire businesses and industries with this data,” he says.
Many companies are doing data-focused cloud businesses, such as MongoDB, Databricks, Snowflake Inc. and many more. Is this a data cloud or supercloud? Or an ISV? Selipsky has a different view, one that’s centered on AWS by virtue of the reality that it’s cumbersome and costly to move data to other clouds or platforms.
“It’s not a data cloud,” he says. “We’ve got one cloud [AWS] which has got a set of integrated capabilities. So for example, should you have to move data between different services when you want to, if you’ve got data in one place and you want to analyze it using another capability, should you have to move it every time you want to analyze that data?”
Whatever it’s called, it’s a big deal, because the industry has been trying to solve the hassles and costs of developing data applications for decades. The complexity and scale problem around data will never go away. Querying the data where it is versus moving it around and then to develop data-driven apps is a big deal. If AWS gets this right, it will bring in the next big thing: a modern full-data stack to tame the complexity of managing data at large scale.
Data as code
The notion of “data as code” requires data to be freely available, secure, timely and relevant for the developer or the application itself. Not having the correct data fed into machine learning or being incorporated into an application can result in bad experiences and business disruption and misinformation. Agile data management and data governance is an important part in making this new “data as code” capability successful.
Additionally, data governance is a huge issue, where customers are struggling to balance innovation with compliance. There are two sides of the data innovation coin. On one side, if companies provide too much access, then it’s possible for data to end up in places that it shouldn’t be and viewed by people who shouldn’t be viewing it. On the other side, if companies are paranoid about security, then they lock it down so that almost nobody can see it. It’s a conundrum that Selipsky says has driven outsized interest in data governance.
“If you have too much control, you’ve locked it down and you actually don’t get the use, you don’t get the value out of your data now,” he says.
Bottom line: The world of data is changing.
“Expect that AWS machine learning and AI will be infused into many more services and applications – not just AWS but others in the ecosystem,” says Dave Vellante, my fellow host of theCUBE and the creator of the Breaking Analysis podcast, the next installment of which this week will look at what to expect at this year’s re:Invent. “The data stack and applications stack will come together as organizations build data apps and data products. Data expertise will move from the domain of highly specialized individuals to everyday business people and we are just at the cusp of this trend.”
AWS’ crown jewel: infrastructure
“I want to run my applications and workloads more slowly on lower quality infrastructure and pay more.” — Said no developer ever
For all the new opportunities, this wouldn’t be re:Invent without more innovations in infrastructure. Over the years AWS has been working on ways to reinvent compute across all the ways that customers power their applications in the cloud today – EC2 instances, containers and serverless. Its third-generation Graviton chips keep delivering price-performance unmatched by any competitors, and we’ll likely hear more about it and other chips at re:Invent.
“I think other folks are trying to move on custom silicon and are struggling to get internal alpha versions of custom silicon apps,” Selipsky says. “They’re just years behind us. We’re multiple generations in.”
Based upon AWS price-performance advantage, we expect to see savvy cloud customers moving to new Graviton-based instances as fast as possible. A large customer who wanted to remain anonymous told SiliconANGLE about its experience working across the Big Three clouds. “AWS is far better than Azure and Google cloud in terms of running on Graviton — it’s a no-brainer,” the customer said.
The bottom line
This year at re:Invent is about bringing the best of the AWS classic price-performance cloud capability with this new wave of higher-level services, modern data stack, intelligent applications and specialized solutions that create not just applications but new platforms. It’s not just the technology. It’s business transformation. And it’s up to Adam Selipsky to lead AWS in this next wave of cloud computing.
As re:Invent opens next week and Selipsky reveals new products and plans during his Tuesday morning keynote, customers and partners will soon find out if they’re on the same journey.