AWS quarterly revenues grow 64% to $2.6 billion

amazon awsAWS reported growth of 64% year-on-year growth to $2.6 billion for the quarter, becoming one of the few tech giants to have experienced a healthy Q1.

While IBM, VMWare, Intel and EMC have experienced mixed fortunes during the first few months of 2016, AWS has seemingly weathered the storm successfully. The company now anticipates it will break through the $10 billion barrier for annual revenues, and plans to improve its global footprint with continued expansion and new feature announcements. AWS ended the quarter with 33 Availability Zones in 12 geographic regions, with 11 more planned over the next 12 months.

“I would say there’s no let-up in the pace of invention here, particularly on the AWS side,” said Brian Olsavsky, CFO at Amazon. “We usually quote the number of new features and services to you each quarter, we had 214 in Q1, up from 170 the first quarter of last year. So over 26% growth in this quarter alone coming off a year where I believe the number was 722 significant new features and services delivered for AWS customers last year.”

The company did not update its figures for its data management revenues, at re:Invent AWS disclosed the product suite was at a $1 billion run rate, though it did highlight the Aurora database offering is the fastest growing product in the business unit’s history. The quarter also saw a number of product launches and updates including Amazon Lumberyard, a free, cross-platform, 3D game engine for developers to create games, the general availability of the AWS Database Migration Service, the general availability of Amazon Inspector, an automated security assessment service and updates for its block storage service, Amazon Elastic Block Store.

While the AWS results have generally been well received across the industry, Amazon shares were up 12% during pre-market trading at the time of writing, it would appear to be one of the few bright spots across the quarter for technology businesses, as the accompanying Google Finance screen grab shows.

Finance

 

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The benefits of efficiency and lower cost have been the primary drivers toward the cloud and SaaS deployments, but this is just the low-hanging fruit of a much greater body of potential. According to a Cisco-sponsored IDC report, a second wave of cloud adoption now targets a much more strategic set of benefits, with 54 percent of businesses surveyed expecting cloud to allow them to allocate IT budgets more strategically, and 53 percent looking to cloud solutions to increase revenues.
According to the Cisco study, cloud and SaaS adoption takes place along a spectrum, with ad hoc deployment on one end and a centrally managed cloud platform on the other. On the ad hoc side, early adopters look to SaaS to solve an immediate need. These early adopters are often “power users” or ad hoc staff outside of IT, often managing a specific line of business, such as marketing, sales, or finance, and operating independently and often keeping the apps and potentially beneficial data to themselves.

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Microsoft voted most important mega-vendor by CIOs – JP Morgan report

cloud computing machine learning autonomousA recent report from JP Morgan has stated Microsoft is considered the most important IT vendor globally, with AWS ranked in second place.

In a survey of 207 CIOs, who account for $126 billion annual enterprise IT spend, JP Morgan uncovered Microsoft is considered the most valuable mega-vendor in the IT ecosystem. 46.9% of the CIOs surveyed highlighted Microsoft as the most critical and indispensable to the future of their IT environment, whereas AWS only accounted for 13%. While AWS is still generally considered as the market leader within the cloud segment, feedback highlighted Microsoft’s wider array of enterprise IT offerings (desktop, server, database etc.) positioned it as a much more critical component of their organizations future.

While the cloud revolution has been immensely profitable for certain organizations, the continued drive towards cloud computing has also proved a difficult time for others. Oracle and SAP are two such organizations, according to the report, which have dropped down in CIO’s priorities. Only 11.1% and 9.2% (Oracle and SAP respectively) of the CIO’s said the organizations were the most important vendors to the future of their IT strategy.

In fact, Oracle was highlighted as important to some of those CIOs simply because it was “the backbone of our data warehouse” or “mission critical applications and databases are Oracle” or “difficult to replace” or “too much already invested to move on”. It would appear Oracle is important out of necessity or a lack of choice, as opposed to Oracle’s strides forward in the IT world. The Oracle cloud offering was only mentioned twice by the respondents, compared to Azure being mentioned 16 times.

The report also brought attention to IBM whose fortunes in the new-era of cloud computing would appear to be dwindling. 26.1% of the respondents highlighted IBM would be the vendor which would lose their IT spend as the move towards cloud computing continues. The report also detailed that while only 16.2% of workloads are currently on public cloud, though in five years this figure would increase to 41.3%.

The era of cloud computing is seemingly taking chunks out of Big Blue’s traditional business units, though the team should be encouraged by its efforts in cognitive computing, which was recognized by some of the respondents. IBM’s Watson has been claiming more column inches than other cognitive computing offerings, though it remains to be seen whether this is a sign of intent to adopt from the enterprise community, or an effective PR machine.

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Salesforce launches Government Cloud Lightning platform

Salesforce WearSalesforce has launched Government Cloud Lightning platform, a new offering to which enables US government agencies to connect with citizens and stakeholders anywhere and on any device.

The new product offering is built on the assumption that government agencies are burdened with legacy systems which limit the opportunities to communicate and operate effectively. The team claim the Cloud Lightning platform will enable government agencies to transform their operations to a more modern, mobile and responsive proposition.

In a report published last year, the Government Accountability Office claims $58 billion of their $79 billion IT budget in 2015 maintaining legacy systems, as opposed to investigating and implementing next-generation IT offerings to improve operations. Saleforce has seemingly built its proposition on the idea government agencies are in the process of a transformation to create a more digitally enabled ecosystem.

“Private sector innovation has changed the way citizens expect to interact with their governments, so providing our customers with modern and secure tools is paramount to increasing citizen satisfaction and engagement,” said Vivek Kundra, EVP at Salesforce. “The launch of Government Cloud Lightning, along with extended compliance standards and enhancements, will empower agencies, the aerospace and defense market, and government contractors to digitally transform and connect with citizens in new ways.”

The new offering is built on three key features; The Lightening Experience, the Lightening Platform and the Lightening Ecosystem. From an experience perspective, Salesforce claim the new product will offer users the opportunity to streamline how they communicate and collaborate, as well as create a personalized experience that is consistent across products and devices. The Lightening Platform will help users build apps for desktops and mobile devices, and the final feature will link agencies to Salesforce’s partner ecosystem.

“The Government Cloud Lightning ecosystem is a highly anticipated leap forward for the apps that our federal teams are building on Salesforce,” said Rusty Pickens, Senior Advisor for Digital Platforms at the US Department of State. “Government Cloud Lightning provides us with a modern and clean interface that allows us to build an item once and trust that it will work on any device. Even more importantly, it empowers our diplomats all over the world to access their CRM data right wherever they are, from a mobile device that has all the power of a typical government computer.”

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