Amazon Web Services Financials, Magic Quadrant Facts, & How AWS Started

Amazon Web Services Cloud

Amazon Web Services Cloud

Of course I’m a huge fan of AWS (can you tell by the name of my blog?)

Gartner's Magic Quadrant Image

Gartner’s Magic Quadrant Image

Why are the numbers you’re going to see so mind-blowing? There are several reasons, & I’ll list some below (elaborating on further on down in this post) including the following facts directly from Gartner, who’s “Magic Quadrants” I’m sure you’re familiar with:

  1. AWS has the broadest platform for big data in the market today, with deep and rapidly expanding functionality across big data stores, data warehousing, distributed analytics, real-time streaming, machine learning, and business intelligence.
  2. Gartner1 confirms AWS has the most diverse customer base and the broadest range of use cases, including enterprise mission-critical applications.
  3. For the sixth consecutive year, Gartner1 also confirms AWS is the overwhelming market share leader, with over 10 time more cloud compute capacity in use than the aggregate total of the other 14 providers in their Magic Quadrant!
  4. AWS has computational power that’s second to none1; each optimized with varying combinations of CPU, memory, storage and networking capacity to meet the need of any big data use case.
  5. Gartner1 confirms that because AWS has a multi-year competitive advantage over all its competitors, it’s been able to attract over a thousand technology partners and independent software vendors from popular vendor that have licensed and packaged their software to run on AWS, have integrated their software with AWS capabilities, or to deliver add-on services all through AWS Marketplace. AWS Marketplace is the largest “app store” in the world, regardless of being strictly a B2B app store!(Gartner1)

I’ll get to the numbers right away, but at the end is a great story about how AWS came to be; Andy Jassy’s innovation.

Just last year Amazon started releasing financial information on AWS. Here are some facts:

  • AWS sales rose almost 64% to $2,566B for Q1 of 2016. Compare that to Q1 of 2015, which was $1.566B.
  • Profits increased dramatically, almost 128% to $604M from $265M for the 2015 same quarter results.
  • Amazon is factoring in the cost of stock option compensation for the first time. Therefore, the profit figure for the quarter of April, 2016, would be $716M.
AWS Cloud Revenue (in Millions)

AWS Cloud Revenue (in Millions) (Image courtesy of Fortune)

(AWS Source used by Fortune, cited above)

However, it’s been stated by AWS CFO that the gross profits will fluctuate because AWS constantly cuts prices, adds new features weekly, and is going to invest in 5 new data centers to run AWS Services in more regions just this year. An interesting article on Amazon’s earnings can be found here.

More facts on AWS & AWS Marketplace Business Intelligence / Big Data Analytics:

  1. AWS provides an extensive set of managed services that help you build, secure, and scale big data analytics applications quickly and easily. Whether your applications require real-time streaming, a data warehouse solution, or batch data processing, AWS provides the infrastructure and tools to perform virtually any type of big data project
  2. When you combine the managed AWS services with software solutions available from popular software vendors on AWS Marketplace, you can get the precise business intelligence and big data analytical solutions you want that augment and enhances your project beyond what the services themselves provide. You get to data-driven results faster by decreasing the time it takes to plan, forecast, and make software provisioning decisions. This greatly improves the way you build business analytics solutions and run your business.
  3. Since AWS resources can be instantiated in seconds, you can treat these as “disposable” resources – not hardware or software you’ve spent months deciding which to choose and spending a significant up-front expenditure without knowing if it will solve your problems. The “Services not Servers” mantra of AWS provides many ways to increase developer productivity, operational efficiency and the ability to “try on” various solutions available on AWS Marketplace to find the perfect fit for your business needs without commitment to long-term contracts.

Let me now tell you how AWS came to be, referenced after the Gartner facts above. I hope you find it as fascinating as I do!

Andy Jassy, AWS CEO

Andy Jassy, AWS CEO (Image courtesy of Fortune)

Around the year 2000, Amazon faced a dilemma in its retail business when it decided to let 3rd-party vendors sell products on Amazon.com. I remember signing up for that when I first heard of it.

Although allowing 3rd party vendors to sell on Amazon was a big shift in strategy, Andy Jassy knew it would be better for its customers because it gave them more selection and better choices of prices. 

The dilemma came when they realized in order to expose its e-commerce technology to 3rd parties, it had to decouple many components of its platform through APIs. This led to having business teams communicate with each other exclusively through “hardened, well-documented APIs”, which saved time and vastly accelerated its own product development.

Jassy stated2 , “The experience of having to deliver to customers in decoupled APIs – which was way harder than we thought it was going to be – really changed the way we thought about software.”

A couple years later, Amazon realized that projects were still taking too long because the teams were spending too much time setting up storage, compute, and databases.

Around 2003, Jassy realized that not only was there internal demand for these types of infrastructure services, but none of the old-guard enterprise vendors were building them for the Amazon market. And the lightbulb went off in Jassy’s head that not only their 3rd party vendors could benefit from this, but many other companies as well. Sometime around August or September 2003, Amazon decided to create AWS to provide the infrastructure that was needed for 3rd party vendors to sell to Amazon to the world. AWS was born out of necessity, but with a brilliant mind that could see beyond what was happening and realize it was a brand new business. Jassy was then appointed to lead it.

2Courtesy of Computer Reller News (CRN)

#gottaluvAWS!

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