In his second letter (opens in new tab) to shareholders as CEO, Amazon’s Andy Jassy has supplied an perception into what the longer term seems like for its Amazon Internet Companies (AWS) arm because the world continues to shift digitally.
Jassy likens the current financial difficulties to these of the 2008-2009 recession, and the 2001 interval that preceded it. Every of these thrice, the corporate has needed to re-evaluate its numerous operations and subdivisions and there was one constant all through: buyer relationships.
Amazon clearly has its funds in thoughts, having grown from a pre-pandemic income of $245 billion to a 2022 determine of $434 billion, however Jassy believes that constructing significant and lasting relationships has been pivotal to its success.
Huge modifications for Amazon forward?
Jassy defined AWS cloud clients can profit from scalability and elasticity with out having the costly outlay and depreciating property of on-prem IT. Uptake has continued to be wholesome with clients focusing extra on cost-optimizing relatively than cost-cutting, to the purpose that the corporate’s gross sales groups are “spending a lot of their time” serving to clients to climate the persevering with storm.
Jassy defined: “Whereas these short-term headwinds soften our development price, we like numerous the basics that we’re seeing in AWS. Our new buyer pipeline is powerful, as are our lively migrations.”
A lot of the cloud computing division’s success might be attributed to the in-house silicon, similar to Amazon’s Graviton CPU processors which at the moment are of their third technology, the 2 generations of ‘Inferentia’ inference chips, and the brand new ‘Trainium’ coaching chip.
The not too long ago introduced EC2 Trn1n and Amazon EC2 Inf2 cases, which use homegrown chips, have entered basic availability forward of the corporate’s plans to make generative AI coaching with pre-existing foundations fashions (FMs) accessible to extra companies.
Likening the transition to cloud computing to the migration between bodily retailer places and on-line buying, Jassy explains that the corporate now stands in a very good place to have the ability to accommodate the rising variety of companies seeking to make the change, with 90% of the market nonetheless utilizing on-prem tech.
One other undertaking that obtained a point out within the end-of-year letter was Kuiper, Amazon’s low-Earth orbit satellite tv for pc system to rival Starlink and OneWeb, which it hopes to make commercially accessible in 2024 after the testing of two prototype satellites later this yr.
Trying forward, all of this, says Jassy, will construct a “sustainable, long-lasting, rising firm” that harnesses shut buyer relationships and drives profitability for the corporate. In different phrases, it appears that evidently Amazon isn’t as involved about short-term fluctuations because the 27,000 layoffs recommend.