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Amazon Web Services CEO Andy Jassy talks about companies shifting from Windows to Linux in the cloud at his AWS re:Invent keynote in Las Vegas on Tuesday. (GeekWire Photo / Todd Bishop)

LAS VEGAS — Amazon Web Services CEO Andy Jassy put the company’s neighboring tech giant directly in his sights here Tuesday morning, criticizing Microsoft’s licensing practices and making it clear that Amazon is going directly after the Redmond company’s core business.

“You see this return to the ways of old from Microsoft where they’re not prioritizing what matters to you guys, the customers,” Jassy said in his opening keynote at the AWS re:Invent conference. “People are sick and tired of being pawns in this game.”

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Jassy’s comments were notable in that he wasn’t targeting Microsoft Azure, the cloud platform that directly rivals AWS. Instead, his comments were aimed Microsoft changes that limit the ways businesses can deploy Windows and SQL Server software in the cloud using existing licenses.

He noted that more than half of Windows installations in the cloud run on Amazon Web Services, rather than Microsoft Azure or competing cloud platforms.

“The company that owns and operates this maybe isn’t so crazy about that, so they just decided to change the licensing rules and said, ‘Hey new versions of Windows can’t run on dedicated instances in other cloud providers.’ ” Microsoft, he said, wants a “stranglehold” on that market.

The unstated competitive backdrop: the Pentagon’s decision to award its $10 billion cloud computing contract, known as JEDI, to Microsoft over AWS in a surprise upset in October. Amazon is appealing the decision, alleging it was improperly influenced by political pressure from the White House.

Jassy made Amazon’s larger ambitions clear at the outset of his address, citing market research that shows 97 percent of the $3.7 trillion IT market is still on premises, in corporate servers and data centers, and not yet in the cloud. Jassy made it clear that this is where Amazon will be looking for its future growth, through new cloud workloads and software migrated from traditional IT environments.

“The market segment that we address at AWS is the global IT market,” Jassy said. “If you look today, still the overwhelming majority of spend is on-premises.”

Jassy also described the broader shift away from traditional mainframes and databases to the cloud, and the IBM and Oracle logos were included along with Microsoft in a depiction of technologies moving out of a house, with Amazon boxes waiting to be moved in.

We’ve contacted Microsoft for comment on Jassy’s remarks.

During the remainder of the marathon two-and-a-half-hour keynote, Jassy unveiled a series of new AWS technologies for databases, fraud detection, automation of code review, enterprise search and many other scenarios, with a heavy focus on machine learning as the underlying technology powering the new capabilities.

  • Amazon announced the general availability of AWS Outposts, a hybrid cloud service that lets businesses run AWS services in their own data centers with the same hardware that Amazon uses, in partnership with VMware. Amazon announced Outposts as a preview a year ago. AWS is seeking to counter Google Anthos and Microsoft’s recently announced Azure Arc.
  • In a new twist on the concept, Jassy unveiled a service called Local Zones, a new type of infrastructure offering that reduces latency by putting compute, database and storage close to large cities to reduce latency experienced by companies and users, starting in Los Angeles.
  • Jassy was joined by Verizon Communications CEO Hans Vestberg to announce a new service called AWS Wavelength to bring cloud technologies to emerging 5G networks and mobile devices.

Amazon Web Services is a $36 billion business, based on its annual revenue run rate. AWS has 47.8 percent of the global market for public cloud Infrastructure as a Service (IaaS), about twice the combined share of its closest two competitors, Microsoft and Alibaba, according to Gartner research.

Wrapping up his keynote, Jassy called the move to the cloud “the most titanic shift that we’ve seen in technology in our lifetime” — cautioning that companies will fall behind if they don’t adjust, and promising that they will have the opportunity to achieve once-in-a-lifetime advances if they do.

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