AWS changes the cloud game rules – again!

Firstly, AWS has not brought any new offerings to the market (this was done at the recent Chicago Summit). However, it has repositioned a couple of offered services:

  • Amazon Aurora: an open-source MySQL-compatible relational database offering at 1/10th the cost of traditional, commercial databases. This is the all-time fastest growing service of AWS. It is clearly a vehicle to fight Oracle. Oracle has already reacted with the objective to always stay below AWS prices for Oracle cloud offerings. However, we think that this can only be a loss leader corner for Oracle because the company is missing the credibility, the cost leadership, and the choice of database offerings that AWS is able to deliver. In contrast to Oracle, IBM Bluemix can be seen in a comparable situation to AWS, although they do not have the same market traction yet.
  • AWS Lambda: This was stressed more than anything else at the Summit. It has been positioned as "serverless infrastructure". Customers can define business processes as a service and are no longer required to set up a VM with a database and a programing environment, but only to define events and respective reaction patterns. This can clearly be compared to IBM's Bluemix offerings although both companies offer different services. Here, the AWS Elastic Beanstalk offer may also be worth mentioning as an alternative. However, both vendors have about 70 services ready to go (IBM's slightly above this number, including Watson services). The Lambda services are a live arm for AWS because they free customers from managing VMs and concentrate on solutions without any infrastructure hassle and overhead. On the other hand, customers are potentially locked in, because moving these services to another cloud provider would be very difficult. For AWS it is a step up the cloud food chain in times of computing power and storage space becoming available as network services today: close to "free of cost" with very limited potential for differentiation.

As a last point, we would like to emphasize on the army of solution architects that AWS has hired and is still hiring. These people are dedicated to specific accounts, whom they support in defining the way to move services from on-premise resources into the cloud using AWS. Successful customers are using the solution architects as free resources to define their way into the cloud. For manpower-intensive tasks, AWS partners or AWS Professional Services take over; e.g., data preparation, data movement, setup of VMs, programing of applications etc. Actually, AWS is looking desperately for more qualified people here.

In addition, AWS has arrived in the midst of Germany's enterprises. A couple of high-profile Germany-based enterprises took the chance to position themselves as AWS users: Siemens, Air Berlin, ProSiebenSat1 (subsidiary Glomex), and Dubsmash. Siemens actually announced to make its PLM offerings based on AWS an additional part of its own IoT offerings (based on SAP HANA). Compared to earlier AWS Summits in Germany, one could say that the ratio of business people to developers from start-ups has increased significantly.

Bottom line: AWS is making significant progress in differentiating itself from me-too cloud storage and cloud compute power providers. AWS is moving up the food chain and has understood the customers' requirements of free in-person services helping them make the transition from on-premise solutions to becoming a true cloud service user.