Why the computing cloud will keep growing and growing
SAN FRANCISCO: Jeff Bezos of Amazon, along with a couple of his rivals, may eventually control much of the $1 trillion global market for business computers and software.
That is because Amazon Web Services (AWS), his big-business computing division, is starting to affect more than just the world of computer servers, data storage and networking at the core of computing. Increasingly, it is also entangled with mobile phones, sensors and all sorts of other devices in the so-called Internet of Things.
It’s the same story at Microsoft Azure and Google Cloud Platform, the other two big cloud companies. Startups and giant corporations rent the core resources, along with related software, instead of owning and running their own machines.
What’s next? As innovations like artificial intelligence and connected devices become popular, customers are putting cloud components in mobile computing, home games and email marketing campaigns. In other words, the big clouds aim to be everywhere.
“When has Amazon ever thought about anything other than world domination?” said Lydia Leong, who follows cloud computing at Gartner. Not content to be in big centralised data centres, she said, “they want to be at the edges, whether that is a customer’s own computers or the Internet of Things.”
This aim for domination was clear at Amazon’s big customer conference, called Re:Invent, which was held in Las Vegas this month. In one talk, an AWS executive showed off the company’s 8,700-mile undersea cable, part of a global network that each day adds computing power equal to that inside a Fortune 500 corporation, and spoke about this expansion. He talked about crushing the costs of servers and networking, most likely sad news for old tech giants that make those things, like Dell and Cisco.
In a nice bit of showmanship during the main keynote, Andy Jassy, the head of AWS, appeared onstage with an 18-wheel truck carrying a device that could suck 100 petabytes of data out of a customer’s computers and put it in the Amazon cloud. That is equal to 2 billion filing cabinets of paper, which a surprising number of companies now possess in digital form, thanks to things like video and sensors.
Put that together with some software Jassy talked about that would be on chips made by Intel but capable of gaining access to the AWS cloud, and you get the picture: There isn’t a part of computing Amazon doesn’t want to touch.
It is easy to see why this matters to Amazon. In the third quarter, AWS had revenue of $13 billion a year, growing at 55% annually. AWS was 10% of Amazon’s revenue, but more than 100% of the company’s operating income. Amazon’s international retail business lost money, and US retail sales are nowhere near as profitable.
Amazon says it is hardly moving away from a core business of providing largescale computing, but rather finding more ways to sell stuff related to it by moving to edge devices.
Competition is getting more intense. AWS now has 81 services, including ways to work on home video games. Microsoft’s 67 services include Internet of Things “hubs” and email marketing campaigns. Google has 53, including ways to deploy mobile software globally and steer performance with data analysis. Comparisons of services are difficult, as one company’s service may encompass two or three offered by another.
Machine learning — a method for computers to gain knowledge without being programmed with that information — is front and centre for Alphabet’s Google, said Urs Hoelzle, the head of technical infrastructure at Google Compute.