An Amazon cloud vice president explains how AWS is taking on Microsoft on its own turf

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An Amazon cloud vice president explains how AWS is taking on Microsoft on its own turf
Matt Garman AWS Photo

Amazon

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Matt Garman, vice president of compute services at Amazon Web Services

  • Earlier this month, Amazon Web Services launched AWS Outposts, a hybrid cloud product that allows customers to run their applications on both AWS and their private data centers using AWS hardware.
  • AWS took longer to release a hybrid cloud product than Microsoft or even Google Cloud, but Matt Garman, vice president of AWS Compute Services, says that it wanted to find a "good model" for offering a product that is easy for customers to use.
  • Garman says Microsoft's product requires a lot of setup, while Google Cloud's doesn't include hardware, so AWS wanted to offer a product that addresses those two issues.
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When Amazon Web Services launched its long awaited product Outposts earlier this month, it stepped into a game where Microsoft had long been playing.

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Outposts is a hybrid cloud product, which means it allows customers to run their applications on both their private data centers and AWS using AWS hardware. Many companies, especially financial institutions and banks, choose to store their data on private data centers because of regulations, but still want the flexibility of using the cloud for their other needs.

Until this product, AWS was basically promoting going all-in on the cloud, meaning it was trying to convince customers to ditch their data centers and just use its cloud services instead.

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So, when it first announced Outposts last year, it was major news for customers. Now, it's generally available.

Meanwhile, Microsoft has long promoted hybrid cloud, while Google Cloud launched its own product Anthos this year. Industry analysts have said AWS is now reacting more to Microsoft's moves.

It took AWS longer than its competitors to offer such a product because it was trying to figure out the best way to do that, says Matt Garman, vice president of AWS Compute Services. It didn't want to mimic what its competitors were offering, or how they were charging for their hybrid services.

"Customers have been asking us for a long time about how we can help them run efficiently in their data centers," Garman told Business Insider. "For a while, we were struggling with a good model. We didn't like a lot of the models that were out there. The things other folks were offering to manage data centers were very different from the cloud."

Garman says Azure's product 'hasn't been very successful with customers today'

Garman says that AWS didn't have a hybrid cloud product before, not because of "some philosophical difference," but "just because we didn't have a product that was great."

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AWS didn't want its own product to work like other popular hybrid cloud options, like Microsoft's Azure Stack or the open source OpenStack. The problem comes when the cloud updates faster than on-premise data centers that are "lagging behind," he says.

"Think about anything from OpenStack to Azure Stack," Garman said. "Effectively what that does is, it's a software package. Customers have to buy their own hardware, install the software and run the software ... If you add add a feature in the cloud, the on-premise doesn't get that functionality. It's always diverging."

For this reason, Garman is quick to find fault with Amazon's major competitor in the area, Microsoft's Azure Stack, even going as far as to claim Azure Stack "hasn't been very successful with customers today," Garman said. "It's difficult to manage, difficult to patch, and it diverges from the public cloud. That's a model that customers have spoken loudly and clearly to say they don't like it."

Microsoft would likely disagree with that assessment. In October, Microsoft CEO Satya Nadella even named Azure Stack as a new product "seeing traction" during in his quarterly earnings remarks.

But Wall Street analyst Jason Ader of William Blair more-or-less agrees with Garman's view in a November 6 research note. He writes that Stack has "met with limited success" so far because its aimed at a limited customer base, such as those that need a lot of computer power at remote locations or those with regulatory needs.

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As for Google Cloud's new Anthos product, Garman points out that there's no hardware component to it and says that makes it a "much less consistent environment" because each customer would have to run it on their own hardware.

With Outposts, AWS was aiming for a product that worked exactly the same for applications whether they ran in Amazon's cloud and or in a customer's own data center. When an AWS customer chooses Outposts, AWS will help them install it into their data centers using the same security controls and features as Amazon's cloud, he says.

The work for AWS Outposts began a year and a half ago. And during the past year, AWS had beta customers test it. For example, AWS has worked with Philips Healthcare, Volkswagen, NASDAQ, and Lockheed Martin.

AWS is 'happy to adapt to a changing world'

Before AWS itself was a hybrid cloud player, AWS prohibited its partners from even mentioning terms like "hybrid cloud" at its events, partners complained, but the company has eased up on these rules since then.

While Garman says he doesn't see AWS's entrance into this market as "much of a shift" for the company, he is now echoing what Amazon's competitors have been saying for years: that many companies will do hybrid computing and not go all-in on the cloud.

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"I think customers are going to want to distribute pieces of their applications in ways that make sense," he says.

And although AWS was a bit later to the hybrid cloud game, Garman says some of Outposts' technology underpinnings have been around for a while. It has its roots in the AWS Nitro System, which is its networking architecture.

"That's turned out to be an incredibly powerful enabler for Outposts," Garman said.

By listening to customers, Garman says that AWS is "happy to adapt to a changing world."

"I view it less as we changed our mind," Garman said. "We do continuously learn from customers. We change our minds a lot. We take away from customers what they think is important."

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