The One Statistic About AWS That You Need to Know in 2017
The New Year certainly appears to bring out the fortune tellers in people. Last week it seemed like every other post on LinkedIn was someone making predictions for what’s going to be big in 2017. Most of these posts follow a similar patten: take a list of buzz words like IoT, Blockchain, Agile etc. and then write a bullet point on each saying how this year it’s going to take off or an industry sector is going to go mad for it.
The trouble with making predictions in the world of corporate technology is that adoption tends to build over time. Rarely do we have a Pokemon Go-type phenomena where overnight everyone goes Agile or rolls out Blockchain.
But in a discussion with AWS late last year I heard a very striking statistic that really stood out — and when you look at the other indicators too — it tells you everything you need to know about AWS and the Enterprise space in 2017.
The Magic of AWS
To understand what this metric means it’s worth refreshing our minds as to where Amazon Web Services is, and nothing illustrates that better than the Gartner Magic Quadrant for IaaS — a Magic Quadrant that looks like no other:
There’s two key takeaways from this chart. The first is obviously how far ahead of the competition AWS is; only Microsoft is anywhere near them (more on that shortly). But the second point worth reflecting on for a moment is that Gartner rates industry giants such as IBM, Fujitsu and NTT as “Niche Players” — these are some of the biggest and most established IT firms in the World. Notably HP and Cisco aren’t even listed, both having already thrown in the towel. And two of the others (Rackspace and VMWare) have bet their futures on AWS and each formed a partnership with them.
With AWS, Amazon has created an unstoppable, customer-centric monster devouring tech industry giants that stand in its path.
In Q2 2016 AWS delivered 58% YoY growth making AWS an $11bn run-rate business. No other IT vendor has ever reached $10bn run-rate so fast.
The only real competitor to AWS in the IaaS space is Microsoft with their Azure offering. Clearly, Microsoft is a formidable competitor in this area: it has a good track record, an extensive sales operation and partner network and a straightforward licensing and technology migration path that includes a simple Hybrid Cloud solution.
In the Enterprise technology world the Microsoft stack is an enormous and immensely profitable market, with Gartner estimating that 70% of Enterprise servers are running Microsoft.
And here’s the stat that matters …
Only 24% of AWS workloads are Microsoft
That’s a huge gap, and a huge market opportunity that AWS is well-positioned to address.
AWS is Well Positioned for Enterprises
AWS has extensive Microsoft capabilities covering all the main technologies, and the migration path is eased with Bring-Your-Own-License for most license types. Furthermore, the VMWare partnership announced in October answers a key question for Enterprise CIOs providing the desired Hybrid Cloud option which simplifies cloud strategy. In mid-December Amazon also launch AWS Managed Services specifically targeted at Fortune 1000 and Global 2000 firms.
Amazon Web Services has been busy signing up large corporate customers, some of the deals are public knowledge like HSBC and Citigroup — but a lot of other unpublicized deals have also been completed.
So, whilst making predictions can be perilous territory it certainly does seem that 2017 is shaping up to be the year that large Enterprises embrace AWS in a big way.
