Amazon Web Svcs. in Fight of Its Life as Customers Like Dropbox Ponder Hybrid Clouds and Google Pricing
For many years Amazon Web Services was the only public cloud in town. That is no longer true as Microsoft and Google are now aggressively selling their infrastructure to startups and enterprises alike. In that superheated battle, they are wooing even Amazon’s biggest and best customers; companies like Dropbox, Airbnb, and, yes, Netflix.
That could be one reason AWS sales dipped this quarter. Amazon announced Thursday that for its second quarter, which ended June 30, the category that includes AWS saw a 3 percent sequential revenue slip. That “other” category — which also includes advertising services and co-branded credit card agreements — also logged 38 percent growth year over year. That sounds great until you realize year-over-year growth in the first quarter was 60 percent. There have been other slight quarterly dips in the category’s otherwise relentless rise over the past few years, but they’ve mostly happened between fourth and first quarters.
The other thread in this narrative is that many big companies — including startups that were nurtured on AWS and then grew — are finding the hybrid cloud model attractive. This involves keeping some workloads on public clouds like AWS, Microsoft Azure or Google Cloud Platform and others in-house on a company’s own servers. And for workloads that will remain in public cloud, companies would be fiscal dopes if they did not spec out AWS competitors; if only to wring pricing advantages from AWS. Starting a few years ago, this is exactly how big Microsoft Office shops wielded Google Apps to wrangle concessions on their Microsoft enterprise licenses. What’s old is new again.