Some Legacy Vendors Still Underestimate AWS – As They Gasp for Air

“Amazon is propping it up.”

“They are just dev-test.”

“Their security is not up to standard.”

“They will fizz out.”

“They are not suited to the enterprise.”

Not a week goes by that I do not get told these “claims” and “insight” into Amazon Web Services (AWS). Yes, that AWS.

The insight comes from a small number of vendors, and individuals. It is easy to guess who they are, they collectively used to dominate, and still cannot understand why they no longer do. It is a perspective incredibly removed from reality.

Let’s put the dominance and performance of AWS into perspective. On current growth rates, it will be a $20B cloud and subscription platform company by the end of 2017. By the middle of 2018 it will be the same size as DXC Technology, which is the unified HP Enterprise Services, EDS and CSC.  It is larger than European IT Services powerhouse Atos, larger than Cap Gemini, with the list growing with each quarterly result publication.

AWS is not merely an IaaS provider. It has evolved to have a much deeper offering than what that out of date perspective suggests. It is a deep platform, covering IaaS, PaaS, Machine learning, Database and more. While not all offerings are entirely dominant and AWS, is far from perfect, it is still a once in a generation company.

Who is expert at dismissing AWS? The legacy vendors that have had their business hit so badly by AWS. Individually and collectively they hope that AWS is going to disappear as quickly as it has risen. These firms used to dominate, and believe that they have a divine right to continue to do so. Bad news. AWS is going nowhere. It will evolve, and that is perhaps even worse news for the legacy vendors. They cannot change or disrupt at the same pace as AWS, they do not have the customer focus, flexibility or reputation, and now languish, some with revenues that have halved in the last ten years, offering products no-one wants. These vendors included traditional IT Services providers, Telco’s, equipment manufacturers, distributors and managed services providers.

As I have written for many years, the only Tier 1 enterprise vendor who seriously has made the shift from legacy to the innovator, and that can compete up front with AWS is Microsoft. As highlighted, so many of the rest are still sitting in denial without the willpower, capital or culture to shift. (Of the smaller vendors, only Adobe can claim the transformation to SaaS and cloud is complete)

Is AWS perfect? No. Does it still have challenges? Yes, in the enterprise space, in the database space, in the partner area amongst other areas, challenges remain and will continue to. As highlighted by capioIT, some customer events need work as well. One day it may be threatened and toppled as the dominant provider. That day is not today or tomorrow. Old school vendors have to accept this.

Legacy vendors (and in a story for another day, legacy IT departments) have challenges that question their survival every day. They need to stop questioning AWS’s longevity, stop deflecting and make the dramatic, and traumatic from a business perspective, transition that they need to survive. Otherwise, they will still be underestimating and criticising AWS as they sink to the bottom of the IT market. Rackspace has done it, NetApps is trying to do it, still, others think it will pass.

Capture Point

Since its inception, too many competitors have not taken AWS seriously enough, even as their own strategy fell apart and revenue went into decline. While logic would dictate lessons have been learnt, too many individuals and their organisations still take the view that AWS will be a historical footnote in the great book of technology. They are wrong and need to wake up fast.

If you require further information, please contact Phil Hassey, CEO of capioIT. capioIT is an advisory firm focused on helping organisations to understand emerging technology as the world becomes Digital. Phil may be contacted easily in the digital and real world.


About capioIT - Phil Hassey

capioIT is an advisory firm focused on helping organisations to understand emerging technology in emerging markets. CEO Phil Hassey established the company in 2010
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