eWEEK at 30: How Amazon Survived the Dot-Com Crash to Rule the Cloud

 
 
By Rick Dagley  |  Posted 2013-12-27 Email Print this article Print
 
 
 
 
 
 
 


And it all goes back to giving the customer what it wants. "[AWS] builds its business by asking business computing customers what they want, creating services that fulfill those wants, and then offering those services at a price below the competition's prices and below what it would cost customers to build for themselves," said eWEEK contributor Eric Lundquist.

Today, Amazon dominates the cloud market, according to data from Synergy Research Group. "Amazon dwarfs all competition," including global IT giants Microsoft, IBM and Google, said Synergy analyst John Dinsdale. Amazon doesn't break out AWS revenue, but in 2013 it could make $4 billion in revenue.

"Amazon is certainly in a leadership role" in the cloud computing industry, Strawn told eWEEK. "My understanding is that it exceeds the combined capacity of the rest of the industry by 14 times. So they're very, very aggressively building out the capabilities and the infrastructure necessary to drive a lot of computing to the public cloud. And they see a great opportunity to do so."

And that opportunity makes AWS' future look even rosier. According to projections by Morgan Stanley analyst Scott Devitt, AWS' revenue could soar tenfold between now and 2022 to more than $30 billion a year. That seems like an outrageous number, but it is one that Strawn said sounds reasonable. "It's a lot of money but … you're creating an alternative to having companies build their own data centers. … That market is very, very large, especially when you look at it globally," he said.

"There's a very large potential market for the public cloud," Strawn continued. "Most computing is taking place in the public cloud. … There are very compelling arguments for the rapid expansion of that market, and Amazon has a meaningful role to play in that market."

There will be challenges, however. As other organizations get up to speed, Amazon will face competitive pressures. The rest of the industry is "working very diligently to in some cases catch up and in some cases have different approaches to cloud computing," acknowledged Strawn, adding that it will be interesting to see how Amazon's biggest rival—Google—works to undercut it over time.

Despite Amazon's success in online retail and cloud computing—major reasons for its No. 49 ranking in the Fortune 500 in 2013—the company is not resting on its laurels. Case in point are its Kindle ebook readers and tablets, including the new Kindle Fire HDX with its one-of-a-kind Mayday button.

And what about those drones that Bezos unveiled on "60 Minutes"?

"The drones are just a publicity stunt," Strawn believes. But more than that, they do give the indication that Amazon is trying to think differently and approach something that really is meaningful to the company, which is finding better ways of delivering physical goods to customers' homes, he said. "This is an indication that they are willing to think differently," Strawn said. And so the company keeps on innovating.

Amazon's logo says it all. The yellow arrow that connects the A and Z depicts Amazon as a company that sells just about everything—from A to Z. And the arrow also represents a smile—which customers experience when shopping on Amazon.com. It is, after all, all about the customer.

 



 
 
 
 
 
 
 
 
 
 
 
 
 

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