The Real Message About AWS Revenues and Growth
Those who view this price war and revenue guessing as merely something confined to handicapping cloud provider competition make a serious mistake. In my view, the biggest impact of the growth of the cloud provider market is its effect on traditional IT and its vendors. R.W. Baird estimates that every $1 spent on a cloud provider displaces $4 that would have been spent on traditional IT gear.
Amazon's 2020 revenue won't just be $40 billion spent on AWS. It will be $160 billion not spent with traditional vendors. As Leong notes, the ongoing growth and price reductions on the part of public cloud providers makes on-premises infrastructure — and therefore kit from legacy infrastructure vendors — decreasingly appealing. Cloud computing will dramatically change the nature of IT organizations as well, transforming their charter from asset ownership to infrastructure management.
So, while many viewed Amazon's Q2 financial results with glee and more than a little schadenfreude, it's too early for AWS skeptics to break out the champagne. Instead, it's time to recognize where we really sit: On the crest of a sea change in the way IT is done around the world.
Named by Wired.com as one of the 10 most influential people in cloud computing, Bernard Golden serves as vice president of strategy for ActiveState Software, an independent provider of CloudFoundry. He is the author of four books on virtualization and cloud computing, his most recent book being Amazon Web Services for Dummies. Learn more about him at www.bernardgolden.com.
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