AWS CEO Andy Jassy explains huge bets in hybrid cloud

  • Amazon Web Services CEO Andy Jassy used his keynote at the AWS re:Invent conference on Tuesday to announce the introduction of several new products and services for the hybrid cloud market.
  • Hybrid cloud is a model that connects public cloud platforms like AWS with a customer’s own servers and data centers. 
  • Notably, Amazon Web Services spent years ignoring — and sometimes trashing — hybrid cloud computing, even as rivals like Microsoft, IBM, and Google have invested heavily in the technology. Jassy now slams those efforts as having “never lived up to the hype.”
  • At re:Invent this year, AWS announced smaller sizes of its Outposts devices, which allows customers to host the company’s cloud services from their own data centers.
  • It also announced that it would allow customers to host from their own servers Amazon Elastic Container Service and Elastic Kubernetes Service, developer tools that help manage cloud infrastructure.
  • Visit Business Insider’s homepage for more stories.

Andy Jassy, CEO of Amazon Web Services, used his keynote speech at the market-leading cloud’s annual re:Invent conference on Tuesday to talk about the company’s big bet on hybrid cloud — a model that aims to bridge the gap between clouds like Amazon’s and a customer’s own servers and data centers.

It’s a hot market, with Microsoft, Google Cloud, and IBM making their own hybrid bets. IBM has even said that it sees hybrid cloud as a $1 trillion market within the next several years, which is why it spent $34 billion to acquire Red Hat. 

Notably, however, Amazon’s recent commitment to hybrid cloud comes after years of ignoring, and occasionally trashing, the very concept.

It had long been Amazon’s position that public clouds like AWS, where customers rent functionally unlimited supercomputing power from the retailer’s hyper-efficient data centers, was the wave of the future — in 2010, Amazon CTO Werner Vogels called hybrid the “false cloud,” and Bloomberg’s Matt Day reported in 2016 that Jassy once flatly turned down major customer Siemens when it asked for hybrid support from AWS.

On stage at re:Invent, Jassy said that the overall philosophy hasn’t changed: “We think most of computing will end up in the cloud over time,” he said. But he pointed at recent AWS products like Outposts, a device for data centers, as a signal that the company now believes that “several other workloads will reside where it makes most sense.”

Jassy acknowledged that this represents a shift for AWS, which once prohibited its partners from using terms like “hybrid cloud” at its events, partners told Business Insider. (The company has since eased up on those rules.)

“It led to all this breathless debate whether this would turn out to be a binary situation [of using cloud and on-premises data centers],” Jassy said of the company’s previous stance on the issue. “We probably contributed a little to that confusion.”

The company announced at the event two new, smaller versions of AWS Outposts, including a device the size of a pizza box. Jassy says it makes it easier for customers to run AWS’s cloud services anywhere they want without having to buy huge data center racks.

Similarly, AWS also announced that its products Elastic Container Service and Elastic Kubernetes Service, which help manage cloud computing infrastructure by way of the popular software container technology, will be able to run on private data centers. 

At the same time, he slammed competitors’ efforts in hybrid cloud, saying that they just don’t deliver.

“In the meantime, you had a number of companies owning what hybrid was, build these hugely hyped capabilities that were supposed to be hybrid and never lived up to the hype and never got traction,” Jassy said. 

‘Arguably the most important change we have seen in AWS’ strategy’

To that point, Microsoft hich has a wide network of enterprise customers in finance and healthcare that may need to keep data on-premises because of regulations, has long promoted hybrid cloud as a key part of its strategy. Google Cloud launched its own solution Anthos early last year, which also allows customers to run their applications on other clouds like AWS and Microsoft Azure. 

These investments in hybrid cloud show that AWS is starting to recognize the value of versatility in expanding its customer appeal, showing that it’s “gradually becoming more flexible in supporting a wider range of customer requirements,” said Nicholas McQuire, senior vice president and head of enterprise research at CCS Insight.

“Meeting customers where they are on their cloud journey and better integrating products to support a range of use cases is arguably the most important change we have seen in AWS’ strategy. This is making it more far more attractive to customers than it was years ago and will certainly benefit the firm beyond the health crisis,” he said.

Read more: An Amazon cloud VP explains why the company is getting into hybrid cloud, a technology that it spent years trashing while Microsoft made big bets

Last year, Matt Garman, the vice president of AWS compute services, told Business Insider that it didn’t have hybrid-cloud product before not because of “some philosophical difference” but “just because we didn’t have a product that was great,” as it was trying to figure out the best way to do that.

Garman added that AWS was “happy to adapt to a changing world.”

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