Amazon Web Services growth continues despite ‘painful outages’, chief says

The head of Amazon Web Services said recent outages at its cloud service were “incredibly painful”, but insisted its rapid growth would not cause greater disruption to customers and internet users.

Amazon’s cloud computing infrastructure suffered two major failures late last year, including a December outage at its data center in northern Virginia, which also had problems in 2020.

Apps and websites used by millions of people – from Ticketmaster to Tinder – have been disrupted, underscoring how the internet relies on the world’s largest cloud computing company.

“We don’t accept them as OK,” said AWS Chief Executive Adam Selipsky in an interview with the Financial Times. “Each of them we find incredibly painful, because whenever clients feel pain, we very intentionally want to feel pain as well. And we do.

AWS still generally gives customers better “uptime” than they can typically provide from their own data centers, he said.

Selipsky returned from Salesforce to Amazon to take over as head of AWS last May when his predecessor Andy Jassy stepped in to replace Amazon founder Jeff Bezos as chief executive of the $1.5 billion tech giant. .

At a time when other technology beneficiaries of the lockdowns of the past two years have seen their growth slow, such as Zoom, AWS has only accelerated.

Last year, sales rose 37% to $62.2 billion, up from 30% in 2020, when so many organizations were forced to hastily adopt cloud technology. Operating profit also rose 37% to $18.5 billion.

“We really don’t see a significant slowdown in customers moving to the cloud,” Selipsky said.

“We’re really still close to the start of the global cloud transition,” he added, pointing to estimates that around 5-15% of IT workloads have moved from in-house corporate data centers to outsourced data centers. infrastructures such as AWS, Google Cloud or Microsoft Azure. “Over time, the vast majority of them will migrate to the cloud.”

While many companies have put major investment decisions on hold during the uncertainty of the past two years, Amazon has “very consistently” invested in new data centers throughout the pandemic, Selipsky said, for s ensure it has the capacity for the planned growth.

This includes in the UK, where this week AWS announced plans to spend more than £1.8 billion over the next two years to build and operate data centers, more than double what it has invested in the UK since launching its London factory in December 2016.

While Selipsky says growth is widespread across all sectors, he’s particularly excited about some recent AWS wins in financial services, including a partnership with Goldman Sachs to launch a “financial cloud.”

Nasdaq begins moving its capital markets infrastructure to AWS later this year, including its matching engine, which it called a “watershed moment” to prove what cloud computing was capable of, due to the requirements of demanding performance of stock trading.

AWS, which was first launched in 2006, has long dominated its market. In its most recent ranking, IT research group Gartner estimates it has a 45% share, more than double that of its next closest competitor, Microsoft.

Still, Selipsky deflects concerns that the market is too concentrated.

“There is no increased risk because of this,” he said. AWS has built each of its 26 “regions” or locations with multiple “availability zones” – its term for smaller groups of data centers – to ensure that if one facility experiences problems, the others stay online.

“The way we’re architected, that means as we continue to grow, I would say their [customers’] operational performance improves over time,” Selipsky said.

Gartner cloud analyst Lydia Leong wrote last month that the December outage “looms large in the minds” of many AWS customers but believes “the sky hasn’t fallen on us.” She added, “The cloud hasn’t suddenly become less attractive or much more risky,” she said.

Selipsky also defended the way Amazon itself is built, at a time when critics, including many politicians and regulators, would like to see the e-commerce group disband. Some investors would also like to see highly profitable AWS spin off from Amazon’s low-margin retail business.

“I think customers are very well served with the way Amazon is currently structured,” Selipsky said, as many want to have a “multi-faceted relationship with Amazon.” That could mean working with AWS as well as the retailer itself, or striking a distribution deal with Prime Video or integrating into its Echo devices.

In recent days, Ukrainian Digital Minister Mykhailo Fedorov has called on Amazon to shut down its operations in Russia, after several other big tech companies pulled out of the region.

Selipsky said AWS has no offices or infrastructure in Russia and primarily serves multinational customers there. AWS also provided security assistance to the Ukrainian government, he added.

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