Amazon Web Services got its start back when the word “cloud” meant big white puffy things in the sky.
But the business certainly has evolved over the past 11 years, with the company now dominating many aspects of cloud computing. AWS reported $2.085 billion in revenue during the third quarter, a 78 percent increase over the same period last year.
And, at least as Adam Selipsky sees it, things aren’t slowing down.
Selipsky, who serves as vice president of marketing, sales, product management and support at AWS, spoke Tuesday morning at an event hosted by the Seattle Metropolitan Chamber of Commerce and Regence. Asked about growing competition in the field, Selipsky — who has worked on AWS since its humble beginnings in 2005 when staffers referred to it as “atomic modular compute components” — noted that they’ve got a “tremendous head start.”
Selipsky said it took about six to seven years before other competitive cloud platforms arrived on the scene, a lead that AWS believes it can preserve by moving fast and staying true to its customer-centric roots.
“Amazon, one of the things it does, is innovates really, really fast,” said Selipsky, adding that more than 500 new services or features were added to AWS last year alone. “We have been able to build and extend this lead.”
And just how far in front is AWS?
“I’d say, from a technical perspective, we still have a three to four year lead,” he said.
And Selipsky thinks AWS can hang on to that lead, in part because of the huge investments it has made in its cloud infrastructure and the constant learnings it derives from working with big brands such as Airbnb, Netflix, Expedia, Bristol-Myers Squibb and others.
“It turns out that it is actually not trivial to build these types of services that run really securely, high-availability, high-durability, and by the way, at a low cost,” he said. “And, most of the old guard technology companies, were heavily conflicted and most of them rely on large, upfront license payments — whether it is databases, operating systems, servers, etc. So, most of them didn’t like this model, and didn’t want to essentially get into this business until customers told them this is where they are going.”
Even so, Selipsky said that is is going to make many years for the transition to the cloud to happen, noting that “we are very much at the beginning.”
“For sure, our biggest competitor to this day is the disc drive and the server,” he said. “It is still companies saying: ‘I don’t want to or I don’t know how to make this transition.'”
But, over time, he said most computing infrastructure will make the switch to the cloud, even though it could take some organizations many years to make the transition.
Selipsky added that Amazon will not be “the only winner” in the cloud, citing its enormous economic potential.
“I don’t think there will be a lot of other winners, just given the scale to succeed in this space, but whether it is Google, whether it is Microsoft, whether it is IBM, those are all companies that are making efforts in this space, and I am sure that, at least, some subset of those — or others like them — will be amongst the other small number of winners here.”
In fact, Selipsky see parallels between what’s happening with cloud computing and what happened to electricity distribution 130 years ago.
“If you were a successful, sophisticated big manufacturing company and you wanted electricity in your plant, you had an electric generator in the basement. That’s how you got electricity. It really didn’t take long. It took 20 or 30 years before there were two things — independent power producers and then first regional and then a national electric grid. And, in a relative short period of time, the entire paradigm of how electricity got delivered was turned on its head. And now you can actually see that we have some pictures of these electric generators sitting in museums. It seems kind of quaint, and it is almost a hard story for me to wrap my head around: ‘Well, of course people aren’t going to generate their own electricity.’ Well, that’s what they did, and these things are now in museums. If you think about it, it just doesn’t make sense for an insurance company to be generating its own electricity. Simarlily, we don’t think it makes a lot of sense for an insurance company or a media company to be running their own IT infrastructure, because they have a lot more value-added, differentiated things to worry about on behalf of customers.”