Amazon Aims to Win Doomsday Battle for Cloud Control
It was George Orwell who wrote the infamous truth in his novel Nineteen Eighty-Four (1948), ‘Who controls the past controls the future. Who controls the present controls the past.’
Today, that is well paraphrased by a world war that is beginning. ‘Who controls the cloud controls the internet. Who controls the internet controls the future’.
Amazon Is Arming Itself for War
Amazon looks set to extend its operations way beyond retailing, to make it a major global technology company with plans to dwarf Apple and Google.
In a new year interview with the Sunday Telegraph’s Katherine Rushton, Andy Jassy, head of Amazon Web Services (AWS) claimed that his technology unit was growing so rapidly it would ‘catapult past’ its rivals.
It’s estimated that currently AWS contributes around 3% of Amazon’s near $50 billion a year turnover. The cloud will grow that exponentially, if even conservative estimates are believed.
Amazon’s cloud computing, data storage and software are offered on a ‘pick and mix’ basis which is proving very popular as their customer base expands.
A Global Grid
Jassy likened cloud services to the national power supply grid a hundred and fifty years ago which revolutionised power generation away from individual companies. ‘I think we are at the beginning of a similar shift’, he said, arguing that AWS is the company’s most ‘misunderstood and potentially under-appreciated asset.’
He denied there was any plan to ‘own’ the internet, but they simply recognised that web services were ‘the building blocks of the internet.’ He said that if developers would build web applications using web services, then the operating system ‘became the internet’.
Is that a coded statement about future ownership of the world wide web?
Long Term Time Horizons
Rushton wrote that Amazon’s founder Jeff Bezos told a conference in Ls Vegas last November that ‘time horizons matter a lot’. He has invested in a 10,000 year clock that ticks once a year and has a cuckoo to herald each millennium as an ‘icon for long-term thinking’.
His starting point of selling books online, ‘easy to store and easy to ship’ was the guinea pig as he perfected his supply chain. Now his retailing operation is one of the biggest in the world.
The Kindle e-reader was a similar loss-making launched product which built a place of apparent necessity in people’s lives. It was, and still is, a must-have gadget.
That same approach is being applied to cloud services. Initially for their own business, the giant facilities are offered to the market at extremely competitive rates, whereby clients activate fully flexible services on demand, concentrating on developing their businesses instead of worrying about buying space in servers and other infrastructure.
Looking at it now, it seems a realistic and achievable business idea. Seven years ago when Jassy wrote the plans, it seemed revolutionary.
That seems to be the trick in power grabbing. Make your services/product indispensable, effective and possibly trendy. Google managed it with web search, so in that sense they already ‘own the net’.
Amazon clearly aim to own it even more through their cloud. And they are not alone. Microsoft is the top technology giant arming up for this war to control the web. It looks set to become an interesting battleground in the next year or two. A bit like the military ‘star wars’ of space warfare of the 1980s, but without the nuclear fall out.
Just the business and personal collateral damages. Dissing rivals is already part of it. Jassy rubbished ‘cloud-washers’, businesses who combine old-fashioned data storage with virtual networks and pass it off a ‘private cloud.’
The old guard of techno companies (like IBM, HP, Oracle) have enjoyed big business for decades, but their services always demand legacy software and hardware to be functional. Jassy calls what Amazon are offering, ‘the proper cloud’.
Retail and gadgets grab the headlines for now, but they are mere appetisers for the conflict that is coming. Rushton called it Goliath vs Goliath. She looks to be proved right.
The Sunday Telegraph, Katherine Rushton, Goliath vs Goliath, 30 December 2012
Take a look at:
Is a Kindle the Best Way of Firing the Reading Habit? 19 December 2012
Amazon Delivers Jobs, New Technology and Efficiency Besides Parcels, 11 December 2012
Amazon Is Not Yet Quite the Biggest Beast in Retail Jungle, 10 December 2012
Policing the Internet: Everybody Wants to Do It, Nobody Will, 10 October 2012
Who Really Gains When Tech Giants Clash? 17 September 2012
It’s Never Too Late to Hop on a Cloud, 2 May 2012
End of the World Wide Web? 23 April 2012