AWS is the fastest-growing enterprise technology company in history, according to Deutsche Bank analyst predictions. Its 2017 valuation put AWS at $160 billion, on 2017 revenues of $16 billion.
Deutsche Bank analyst Karl Keirstead said, “We conclude that a 2017 revenue multiple of 10x seems fair for AWS, which given our 2017 AWS revenue estimate of $16 billion implies a valuation of $160 billion. Measured by revenues, AWS is approximately 6x larger than its biggest rival Microsoft Azure and is arguably the greatest disruptive force in the entire enterprise technology market today.”
Amazon’s cloud business grew 78% year on year, with $2.1 billion in profits. Those numbers put AWS in sync with legacy giants according to Tech Week Europe. “IBM currently stands at a valuation of $160 billion, whilst Oracle is at $170 billion. Considering these are whole companies in themselves, a division of Amazon which has only been operating since 2006 is no small feat.”
Head of AWS, Andrew Jassy said of his success that “Every large technology company in the world is marching fast now to try and build a copy of what AWS has built. That is not a surprise to any of us at AWS or to somebody that has worked on the business from the very start. We always expected there to be a lot of companies pursuing it.”
And with copycats as large as Microsoft (number two in the cloud infrastructure market with estimated annual revenues of $1.4 billion, according to Keirstead), what’s a cloud service provider to do?
Make the Most of AWS and Azure
Cloud service providers and telcos are going to struggle to catch up with AWS – after all it is 6x larger than its next competitor. But what is important is making the most of these technologies. And that calls for a multi-cloud strategy.
All organizations globally most likely already have a multi-cloud strategy whether they know it or not. The challenge is to ensure that there is sufficient quality of management across all of these clouds. Otherwise just as VM sprawl exists, so too will cloud sprawl.
- Telcos and service providers – if you sit in this bucket and you’re trying to compete with AWS – stop immediately. You might have carved out a nice niche for yourself, but at some point (and we bet it has already happened plenty) you’ll be asked about how you compare to AWS on costs, features, etc. Position yourself to defend against this question now by giving your customers the option to use the cloud that works best for a given workload, based on price, performance or geography. This means it might sit on your data center or it might sit with AWS, but having the right multi-cloud management tool in place gives them the freedom to choose.
- DevOps – are you attempting to manage cloud sprawl? Are you trying to get the best cloud for one department that is different from another? You need the freedom to choose the right cloud for your application. But you also need a quick and simple way to automate the deployment and configuration of applications consistently across multiple clouds. Consistency is key because if you don’t establish it, your teams might not stick to the plan and cloud sprawl and cost inefficiencies will result.
Why is AWS’ Growth Important?
You’ll all be too familiar with the phrase ‘nobody gets fired for buying IBM’. The same will hold true to AWS. But the good news is not all of your prospects’ and customers specific requirements can be satisfied by any one cloud If you can give them the ability to utilize the cloud they want, when they want it, and your own cloud adds its own value for the markets in which you specialize, you too can grow with the likes of AWS, Azure and the other industry giants.
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