Why AWS leads in the cloud

The rumors of Amazon Web Services’ fall from the pinnacle were premature. In the push to democratize cloud computing services, AWS had the jump on everyone from the beginning, ever since it was spun out of the mega retailer Amazon in 2002 and launched the flagship S3 storage and EC2 compute products in 2006. It still does. 

AWS quickly grew into a company that fundamentally transformed the IT industry and carved out a market-leading position, and has maintained that lead — most recently pegged by Synergy Research at almost double the market share of its nearest rival Microsoft Azure, with 33 percent of the market to Microsoft’s 18 percent.

Market tracker data from IDC for the second half of 2019 also puts AWS in a clear lead, with 13.2 percent of the public cloud services market, narrowly ahead of Microsoft with 11.7 percent.

As with any business, Amazon’s cloud success comes down to a confluence of factors: good timing, solid technology, and a parent company with deep enough pockets to make aggressive capital investments early on.

There are other, unique factors that have led to the success of AWS, however, including a relentless customer focus, a ruthless competitive streak, and continued commitment to “dogfooding,” or eating your own dog food — a perhaps unfortunate turn of phrase that has proliferated through the tech industry since the late eighties.

Dogfooding refers to a company making a bet on its own technology — in Amazon’s case by making it publicly available as a product or service. This is what Amazon did with S3 and EC2 in 2006, and it’s what Amazon has been doing with almost all of its AWS product launches since.

Copyright © 2020 IDG Communications, Inc.

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