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AWS re:Invent 2017: Wikibon Expectations

In between meeting with customers, crowdchatting with our communities and hosting theCUBE, the research team at Wikibon, owned by the same company as SiliconANGLE, finds time to meet and discuss trends and topics regarding digital business transformation and technology markets. We look at topics from the standpoints of business, the Internet of Things, big data, application, cloud and infrastructure modernization. We use the results of our research meetings to explore new research topics, further current research projects and share insights. This is the seventh summary of findings from these regular meetings, which we plan to publish every week.

AWS re:Invent is the event in the technology industry, and Wikibon – with theCUBE – will be there in force. Last year, we left AWS re:Invent 2016 saying this:

Our take? It’s AWS 2.0. AWS proved the cloud can work for your enterprise: Your workloads. Your big data. Your complex business problems. We encountered a thriving ecosystem that, while still relatively adolescent in its structure, is poised to make AWS an increasingly attractive option for even the most rigid, demanding shops.”

Over the past year, AWS has built on its 2.0 momentum, further establishing itself as one of the handful of technology companies that really, REALLY matter. However, the industry hasn’t been sitting still. Today, AWS faces a number of challenges, including:

  • “Application cloud” options are becoming increasingly attractive. The two main poles in the cloud industry are AWS representing the IaaS approach, and MSFT and Oracle the “app cloud” approach: AWS has to build an ecosystem around IaaS; MSFT and Oracle have to migrate their ecosystems to the cloud. This is not to diminish SaaS (which arguably fits under the “app cloud” designation), but most enterprises and partner vendors are not navigating their technology futures by the light of SFDC, for example. In the next year, software providers are going to accelerate the process of aligning themselves with one or another pole, perhaps not exclusively, but with enough intensity that leadership in the cloud space will be impacted.
  • Google is a real cloud option. After years of being a source of potential energy in tech, Google Cloud Platform (GCP) has gone kinetic. Developers, in particular, are excited by Google’s successful open source approach, heating up technologies like Kubernetes, Istio, and Tensorflow. While years behind other cloud leaders in customer and partner terms, Google’s ability to bind to developers makes Google Cloud Platform (GCP) an increasingly viable IaaS option, and AWS has to respond.
  • Multi-cloud is the perceived end-game. Perceptions of AWS have gyrated pretty wildly over the past decade. In the minds of many, AWS began as a pipe dream, but then mustered the brains and will required to create the cloud business. Then, for about a year, it was going to dominate everybody and everything in tech. Today, most presume that AWS will be one of many cloud options. That’s what Wikibon thinks, too: Our models suggest that AWS grows with the cloud industry, thus retaining and not gaining share. But while AWS leads the cloud world in so many ways, multi-cloud is not one of them.

Against this backdrop, at re:Invent AWS will continue to tout its customer focus, scale efficiencies, sustained technology investments, and long-term approach to winning. Additionally, we’ll get a peek at “AWS 2.1,” we think will focus on three themes:

  • AI, ML, DL, and more AI. The artificial intelligence (AI) acronyms will be let loose at re:Invent this year. Machine learning (ML), deep learning (DL) and other related technologies will be featured in infrastructure, tools, application, and service forms. Our expectation is that three of the more exciting introductions will be ML for service management, which may be extended into a set of hybrid cloud capabilities, an AI workbench capable of supporting an entire AI-based application lifecycle, and specialty AI clouds for specific industries that are indicating a proclivity for AI adoption.

  • Building out the ecosystem – and attracting heritage enterprise apps. AWS has been touting migration services (AWS SMS, or Server Migration Service) to attract legacy workloads, with some success (e.g., VMware). But our research indicates that the high-value apps that are the basis for most operations are staying put. Why? Because while data and apps can be moved, moving database managers is a very risky proposition with little payback. Moreover, AWS wants to expand and extend its ecosystem by attracting the old guards of the application world. How to harvest two birds with one stone? By strengthening relationships with software companies like SAP. We expect a lot of AWS/ISV selfies to emerge from re:Invent this year. Any ISV whose name doesn’t begin with “O” is a candidate.
  • Trumpeting a slightly “duller” edge. Edge computing is where the real and digital worlds intersect. It’s the locus for much of the change in business. The edge, however, is not a single use case. The more you look at the edge, the more varied the computing needs appear. All are shaped by a few common features, though, like latency, bandwidth costs, regulations regarding data use, and intellectual property governance. Additionally, technology requirements differ greatly depending on the characteristics of the user: machines, devices, and people each operate in different roles, at different speeds, and under different degrees of control. While we continue to believe that AWS is likely to deliver a cloud “appliance” capable of extending its services anywhere and anytime, at this re:Invent we expect to see it focus on serving “less sharp” edge requirements. Look for AWS to introduce a range of new services to fill out an edge portfolio that already includes Lambda and Greengrass, but still presumes a degree of centralized control over everything.
  • Action Items.

  • AWS customers and prospects should leave AWS re:Invent more comfortable that that their business can get what they need from AWS’s approach to multi-cloud.

  • Current and potential ecosystem partners should focus on how they’ll sustain their value proposition as AWS expands.

  • Everyone should leave with a clear understanding of the strengths and limits of AWS’s approach to the edge.
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