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Amazon Web Services is not only the most famous enterprise cloud product, it is the most successful one — on a dazzling scale. The service’s growth around the world and its billion-dollar revenue have positioned it lightyears ahead of any cloud competitor, including global tech giants like Microsoft and Oracle. Many in the tech world estimate that it is the largest cloud hosting structure in the world. And Amazon has vocalized its plans to expand into more markets as businesses increasingly look to the cloud for operational efficiency and cost savings.
On Friday, Amazon CTO Werner Vogels announced that the company plans to launch a U.K. region by the end of 2016 or early 2017, making it the third region for AWS in the E.U. The company has regions headquartered in Dublin, Ireland, and Frankfurt, Germany. This announcement comes on the heels of Amazon’s reveal that it intends to launch a region in South Korea as well — the fifth region in Asia-Pacific. The company’s blog said on Wednesday:
The new region, coupled with Korea’s world-leading internet connectivity, will provide customers with quick, low-latency access to websites, mobile applications, games, SaaS applications, and more. For example, the new region will allow service providers in Korea to build the next generation of SaaS applications and to make them available to customers all over the world.
Deutsche Bank is estimating $16 billion in revenue for AWS in 2017. The group puts AWS’s valuation a few years away from $160 billion, and puts Microsoft as the number two player in the cloud infrastructure market with its Azure product. Amazon’s third quarter results showed that Amazon Web Services accounted for 8% of Amazon’s total sales, but 52% of the operating profit.
$160 billion is roughly the value of IBM — another company that has targeted the cloud market — to put that in perspective. Consider that Amazon Web Services would be valued at that figure as just one branch of Amazon. And IBM, SAP, Oracle, Intel, and others have not been able to touch the ubiquity of AWS.
One of the notable elements of AWS’s success is how quickly it built revenue and global prowess amidst doubt and concern over what cloud computing actually is. Enterprises took their sweet time migrating to the cloud as “cloud computing” went from buzzword to household product. Indeed, in late October Oracle founder Larry Ellison said that businesses are still moving slowly to the cloud, and that it has been an ongoing initiative for 15 years.
Ellison also mentioned that two of Oracle’s “competitors” are no longer considered threats — namely IBM and SAP. While all of these companies are seeing success with their cloud computing products, they were slower than AWS to arrive on the cloud scene, and there is something to be said for a “first mover” in business.
But many other suspicions have arisen around why AWS has blown away its competition. One of them is its ubiquity in other markets. Certainly its e-commerce presence is enormous, but in association with Amazon’s brand as a whole, many in tech speculate that its e-commerce business just makes room for its more highly lucrative cloud business.
Part of the struggle of companies like Oracle too is that they had to overhaul their existing businesses - rewriting applications, middleware, and database products for the cloud, as Ellison put it — to accommodate the new cloud market. AWS was the pioneer in public cloud.
Deutsche Bank also emphasized that AWS is six times bigger than its runner-up Microsoft, and it is the most disruptive player in the cloud market. That disruption has had a direct effect on the IT world — something impossible to leave out of the conversation when talking about cloud computing development. And as mentioned, AWS is not only not going anywhere any time soon, it is planning for further expansion. Global domination is on the horizon, if not yet achieved.
