AWS CEO Andy Jassy points to the impact of the economic slowdown in his letter to shareholders, but he says there are no savings for customers.

Don’t say “cost saving”, say “cost optimization”. That’s what the CEO of cloud giant AWS thinks. In a letter to the shareholders, he states that his company’s customers are now intensively committed to such optimization. The AWS sales teams are here to help. That’s important, according to Jassy, ​​who hopes to build a stable relationship with cloud users.

find efficiency

The fact is, customers want the same thing for less money. Because of the complexity of the cloud, they can do that too, just through optimization. After all, too many cloud users pay for services they don’t need, such as virtual machines that are no longer useful but for which no one is responsible. Jassy sees this trend positively and explains that optimization customers want to invest their approved budget in other innovative projects.

On the other hand, he acknowledges that the non-savings impact AWS growth rate. That growth is a bit slower, although AWS is still growing like a cabbage. While cloud companies are optimizing, there are still many on-premises companies where a strategic analysis of the business indicates that it is interesting to outsource some of the IT. This exercise, in turn, has led to new cloud migrations.

Jassy is silent about companies like Basecamp fleeing the cloud because they say the model is significantly more expensive for certain workloads. But it is becoming increasingly clear that memory-intensive workloads in the cloud are not necessarily more interesting.

Proprietary chips and satellites

Jassy and AWS are confident about the future. In this way investments in technology are not reduced. AWS continues to rely on proprietary chips like Graviton 2 and Graviton 3, Trainium (for AI training) and Inferentia (for inference workloads). With its own chips, AWS offers efficient instances with an interesting price-performance ratio and a clear differentiation from the competition.

Kuiper also remains a priority. Kuiper is SpaceX’s AWS version of Starlink. The first satellites are scheduled to enter low-Earth orbit later this year. AWS hopes to offer its Starlink competitors in beta sometime in 2024.

$85 billion

Above all, the letter shows that AWS also notices that the economic climate has changed, but that the cloud provider does not give it much thought. I’m fine? Then everyone will come to the cloud for modern services and solutions. Is it bad? Then companies migrate to the cloud to save and optimize. In any case, AWS continues to grow and the money is coming in smoothly. On an annual basis, according to Jassy, ​​AWS now sees the setup increasing to $85 billion. So there is scope to keep investing.