Amazon's cloud is now embracing an idea that it spent almost a decade trashing - and it's a big sign that Microsoft was right

Amazon

• Amazon Web Services on Wednesday introduced AWS Outposts - a new device that bridges the data center with Amazon's market-leading cloud platform.
• Basically, AWS Outposts is a box that brings Amazon cloud services to your own server infrastructure so you can write apps once and easily deploy them on one, the other, or both.
• It's not a truly new idea - Microsoft, Amazon's chief cloud rival, has been banging the drum for so-called hybrid cloud services for many years now.
• But since at least 2010, Amazon had ragged on the idea of hybrid, calling it the "false cloud."
• It looks like Amazon feels differently now.

At its annual Re:invent conference, Amazon Web Services made an unexpected announcement in the form of AWS Outposts - a hardware box that will help customers bridge their own data centers with Amazon's market-leading cloud.

Installing an AWS Outpost in your data center would give you access to several of the cloud giant's most popular services, including its EC2 compute cloud and its SageMaker AI-training tools, right from your own servers. Indeed, the hardware itself is based on the servers that Amazon runs in its own data centers, the company says.

In real-life usage, this would mean that you could manage your own computing infrastructure, and your AWS infrastructure, all from the same place. The promise is that developers can write an application once, and run it on one, the other, or both, without having to change the code whatsoever. It also comes in another "flavor," where IT departments can use VMware's familiar software to manage their cloud, as well.

"One of the big moves in the enterprise that has moved to the cloud is that it has changed the culture, that builders spend their free time thinking about the experiences of their customers," AWS CEO Andy Jassy said on stage at Re:invent.

This isn't a particularly new idea: It plays into a trend called the hybrid cloud, where customers who can't or won't move to the so-called public cloud wholesale can at least move some of their infrastructure piecemeal.

This is an especially important concept in heavily-regulated industries like healthcare or finance, where there are stringent regulations around where data is stored and how it's managed. Titans like Microsoft and IBM have waved the hybrid banner high as a necessity for large customers.

But here's the thing, though: Amazon spent many years trashing the very idea of the hybrid cloud. As far back as 2010, Amazon CTO Werner Vogels called hybrid the "false cloud" - reckoning that nothing any single IT department could put together would match the power and features of Amazon's own mega-cloud. Instead, AWS has encouraged companies to go "all-in" on its cloud, rather than manage their own servers.

Still, even as Amazon resisted the idea of hybrid, others continued to run toward it, with startups like Mesosphere and big companies like IBM and HPE all rushing to bring software and hardware to market that brought servers and the cloud closer together.

Microsoft, in particular, has made hybrid a major selling point for its second-place Azure cloud. Unlike Amazon or Google, Microsoft has a strong existing relationship with IT departments, and has worked to bring Windows Server and Azure closer together.

In 2017, Microsoft released Azure Stack, a hardware device for the data center - in a very similar way as the AWS Outposts announced on Wednesday. Which is to say, it took a little while, but Amazon seems to have come around to what Microsoft has been talking about this whole time.

To Amazon's credit, it's been inching toward the idea of hybrid for a little while. For instance, AWS Snowball Edge, a storage device for places with limited internet connectivity, recently got additional computing features capable of AWS-like data crunching without having to be connected to the cloud.

Besides, it's a different world than 2010: While businesses are expected to keep moving to the cloud in droves, driving a ton of opportunity for Amazon and its rivals, there are still many more that aren't ready to take the plunge entirely. Amazon, to its credit, might be changing tactics just a little bit to meet the current reality.

"While number of customers can and will move their data onto the cloud, what they really want is the ability to use these same AWS services and storage on premises," Jassy said at a press conference on Wednesday.

Still, it's a noteworthy turnaround for a company that spent many years insisting that its way was the only way, and it'll be interesting to see where it goes from here. If nothing else, it's a proof point for Microsoft that it's on the right track.

Get the latest Microsoft stock price here.