The tension remains high among cloud giants as customers now have diverse options to choose a cloud provider. Even with the increased competition, Amazon Web Services (AWS) is looking for 40 per cent growth among cloud vendors.
The cloud giant published initial bumper earnings on Thursday. As the new CEO, Adam Selipsky, is trying to keep the company’s corporate customers loyal; a tremendous effort is put towards the benefit.
In the fourth quarter of 2021 (Q4), Amazon Web Services (AWS) gained over $17.8 billion. It is a 40 per cent growth year over year. Even though the pandemic took its toll, the cloud giant managed to keep its profit margin high due to new customers coming in every day.
The parent company of AWS, the Amazon eCommerce marketplace where it all began, had its downtime. Even though many people continue shopping online to practice social distancing and lockdowns, Amazon’s other businesses, including international markets, took the hit directly. Amazon shares spike 15 per cent higher as the cloud company managed to get $5.3 billion in revenue.
AWS suffered through a few outages day after day, and customers questioned the work theory of the company. As cloud integration helps businesses stay online, outages on the server side may cause problems for many. ECommerce websites might be hosted on the platform or popular video streaming platforms. A constant userbase found the service offline for hours on video streaming platforms, reported Downdetector. It received some rough comments as the company is vast, so is the dependency.
Many other corporate customers were unsatisfied with the performance, from Citi Bike riders to Disney+ viewers and Delta Airline customers. It didn’t take long for the team to fix issues, but the recent outage on 22 December had risks for relying businesses. Analyst at Wedbush Securities Dan Ives said, “The AWS outage was a black eye for the company as more enterprises race to the cloud.”
Google Cloud, Microsoft Azure, and Amazon Web Services (AWS) stand out among many cloud vendors. In the last quarter, three major outages disrupted the service in the dominant cloud market share. Otherwise, the profit margin would be much higher. Many businesses looked another way when the outages were detected, and why wouldn’t they? There are options.
Customers understood the risk of relying on a single cloud vendor. The current CEO received mixed reactions in his papers as the previous successor, Andy Jassy, seemed to have things figured out. During his reign, there were fewer outages. Invent conference in December was AWS’s annual meeting where Selipsky gave customers a clear view on his end. The promoted AWS so that customers would stick to the cloud they already trust rather than seeking multi-cloud opportunities.
Gartner forecast for worldwide public cloud end-user spending to grow 18 per cent in 2021, later turned out to be s 23 per cent increase. Cloud spending driven by emerging technologies became mainstream; no arguments there. The 23 per cent prediction translates to $332.3 billion in profit, up from $270 billion in 2020. Forbes report confirmed twice as many large companies are expected to adopt cloud strategies on Microsoft Azure. Some of the biggest clients for AWS are American Express Toyota, which is thinking to adopt multi-cloud vendors. Analyst and forecaster Lee Sustar talked about customers’ end as they ‘will continue to look for multi-cloud to mitigate vendor concentration and…workload affinity.’
The forecast will be more explicit for us whether AWS had the biggest growth, Azure or Google Cloud, in the coming months. Even though Microsoft Azure is half the size of AWS in terms of capability, they are putting a tough competition.
Microsoft Azure and Google Cloud had a faster growth record; they are 46 per cent and 44 per cent year-over-year, respectively. If AWS maintains its growth stats and promises customers that their services hosted on AWS servers are as efficient as ever, this may roll out to be continuous growth. Otherwise, the market may diverge, and clients will jump ships.