Amazon's head of AWS Andy Jassy was asked about his deep-pocketed rivals, Microsoft and Google last week, and he made it clear he wasn't concerned about their money because in his view AWS could hold its own. He went so far as to say that some day, AWS would make more money for the Amazon empire than Amazon.com. All chest beating aside, AWS certainly let their rivals know they will continue to build out the product and the others can, well, bring it on.
You see Jassy clearly understands one thing. His company is the clear market leader. Business insider reported in June that AWS owned 37 percent of the Infrastructure as a Service market and that it boasts five times as much compute power as the next 14 rivals combined. That's pretty astonishing, especially when you consider, that IBM SoftLayer alone has built 15 new datacenters this year and Google and Microsoft are investing billions.
Meanwhile at re:invent, AWS was making a flurry of announcements including a new Catalog tool that lets administrators create packages of software and online infrastructure for self-serve portals. They also added Docker support, a new high performance database called Aurora and a host of other new services that should keep developers and IT pros smiling and happy.
And it's worth noting that the market's growing. It's not a fixed pie that the different market participants are fighting over. And even within that growth, Business Insider reported that while the IaaS market was growing 45 percent, AWS was growing by 60 percent. In other words, Jassy is probably right not to worry.They seem to be keeping up just fine.
What Jassy knows to his core is that he was the first to market. His company is the clear market leader and they keep building on the core product. Google and Microsoft might have deep, deep pockets, but no matter what they do at this point, they are playing catch up. Even if Amazon did very little and simply held serve, they would have likely been just fine, but they didn't just sit still.
They put some new arrows in their quiver and they showed they can offer the modern tools that companies need. That's not to say that AWS is invincible because nobody is invincible, but when you have a head start like they do and you take care of business, you should be just fine.
And they continue to work to wring new efficiencies out of their system. Many of the tools they announced at re:invent started as in-house tools and they've added them to the AWS family. The fact is that AWS has kept up with all price cuts of its rivals and it can, not because it's as rich as them, but because it understands the science of running a datacenter as well as anybody outside of perhaps Facebook.
All of this means that AWS can sit pretty on top of the market, but it shouldn't get complacent either because those rich rivals are revving behind them. They may be back in the pack now, but that competitive spirit drives the IaaS market, and as it does, the prices drop and the functionality increases --and that sounds like a good result to me, regardless of who's winning the race.
Photo Credit: Elliott White III on Flickr. Used under CC by SA-2.0 license.