Today: As is tradition, AWS released all the news that won't make the re:Invent keynote ahead of time, the Allen Institute for AI introduces a powerful and truly open-source AI model, and the quote of the week.
Today: what Amit Zavery hopes to accomplish at ServiceNow, Nvidia continues to be the bellwether for AI growth, and the latest enterprise moves.
This era of enterprise software is either the dawn of a new era of corporate productivity or the most hyped money pit since the metaverse. ServiceNow's Amit Zavery talks about the impact of generative AI, how SaaS companies should think about AI models, and his decision to leave Google Cloud.
A pullback in cloud spending and the AI boom put AWS and Adam Selipsky on a defensive footing during the last two years of his three-year run. Matt Garman's job will be to get AWS back on offense.
As he scrambled to explain how AWS planned to respond to the generative AI boom during 2023, Adam Selipsky beat a metaphor into the ground: "We're about three steps into a 10k race," he said, over and over, arguing that in the long run AWS had plenty of time to respond. That might be true, but Selipsky won't see the finish line.
Amazon CEO Andy Jassy, who was the first CEO in AWS history before taking the big job in 2021, named Matt Garman Tuesday as Selipsky's replacement starting in June. Garman is an AWS lifer, the first product manager driving AWS's flagship EC2 service from its inception before taking over the entire compute division in 2016 and transitioning into a sales role in 2020.
"Matt knows our customers and business as well as anybody in the world, and has senior leadership experience on both the product and demand generation sides," Jassy said in the announcement. Duckbill Group's Corey Quinn said Garman "has either shaped the organization or been shaped by it to the point where they are indistinguishable."
Garman was on everyone's short list to be AWS's next CEO back in 2021, but Jassy said Tuesday that at the time Selipsky was hired "we agreed that if he accepted the role, he’d likely do it for a few years, and that one of the things he’d focus on during that time was helping prepare the next generation of leadership."
Now that Garman has been deemed sufficiently prepared to run AWS, he inherits a somewhat different company and enterprise tech market than Selipsky did.
When Selipsky took over in the summer of 2021, his goal was to keep this massive enterprise tech company firing on all cylinders: "Don't screw it up," as Business Insider put it at the time. It's hard to point to anything Selipsky did that derailed AWS, but a year after he took over two outside events changed the course of the market for years to come: The end of zero interest-rate policies and the launch of ChatGPT.
In response to the first development, AWS customers pulled back on spending to a degree cloud infrastructure hadn't yet experienced in its short history, and revenue growth slowed dramatically. In response to the second, competitors pounced; especially Microsoft, which thanks to its quasi-acquisition of OpenAI's technology has been in the driver's seat during the early days of generative AI era.
As a result, AWS and Selipsky played defense during the last two years of his three-year run. As AI hype settles down and cloud spending picks up, Garman's job will be to get AWS back on offense.
AWS still makes a huge chunk of its money from its basic compute and storage services, which it barely talks about anymore amid the distraction of scrambling to appear like an AI-focused company. Last year Garman reorganized AWS sales to focus on reaching bigger enterprise customers and helping them understand how they can best utilize those services, according to The Information.
Microsoft's ongoing cloud security problems are an enormous opportunity for AWS to exploit, which it has already begun to do in earnings calls and keynotes at re:Invent. And given that AWS operating profits nearly doubled during the first quarter, it could be a great time to dissuade those thinking about keeping workloads on premises with some price cuts.
Garman has a mandate for change: "There will naturally be some organizational adjustments that we will make as part of this transition," he wrote in a memo to AWS employees.
During the first 15 years of its existence, AWS was the envy of most enterprise tech companies thanks to its ability to execute and its keen understanding of what developers and operations teams needed to succeed. But those days are over; competitors are not scared of AWS anymore, and customers know they have options.
Garman's tenure will be judged on whether he can recapture that swagger by the time the next enterprise tech boom comes along.
(This post originally appeared in the Runtime newsletter on May 14th, sign up here to get more enterprise tech news three times a week.)
Despite recent challenges to their hegemony, x86 chips still power the vast majority of cloud and on-premises servers in use today. However, over all those years Intel and AMD tweaked x86 in subtle but incompatible ways to suit their own needs, and Tuesday's agreement is a promise to unify x86.
This week a U.K. regulatory agency published summaries of hearings it conducted this past July with AWS, Microsoft, and Google Their responses provide an interesting look into how the cloud providers see themselves, their competitors, and the current state of the market.
For years, Oracle tried to convince longtime database customers who wanted to shed their on-premises data centers to run those databases on Oracle's public infrastructure cloud, slamming AWS at every turn. Times have changed.
A generation of cloud architects, developers, and systems engineers has stayed loyal to AWS over nearly two decades in part because of its reputation for supporting anything it launched that was used by a customer to build their infrastructure. That commitment appears to be changing.
