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>> Hi everyone, welcome to the CUBE's coverage
of AWS re:Invent 2021.
We're onsite in person.
It's a virtual event also, hybrid event.
I'm John Furrier, my host Dave Vellante.
Ninth year, Dave, we've been doing AWS re:Invent the Cube,
and it's 11th season.
We've seen a lot.
>> Yeah, I'll say.
And the show is pretty packed John,
I mean, I think it's surprised some folks
over 25,000 people here.
I mean, obviously a lot of sponsors,
but, a lot of customers too.
>> A bad event for AWS in terms of attendance
is like record breaking for any other company.
People are standing in line for sessions.
It's definitely happening.
People are here to learn.
They're not just all employees.
So definitely a successful event in person,
as well in the live stream,
but so much news to talk about.
Andy Jassy is now the CEO of Amazon,
that's the top story.
Adams SeLipsky's taking over as CEO of AWS.
Long time, Amazonian who left Amazon,
to take the CEO job of Tableau
sold that company to Salesforce under mark Benioff.
Now back to take the helm from Andy Jassy
and quite the pressure cooker here as he takes the stage,
a lot of people are asking is, "Will he do well?"
"Will he fumble on stage?"
"Will he do the right things?"
And does he have what it takes to take the cloud
to the next generation with AWS
as their number one clear far and away,
then the second competitor in Microsoft
and then a look distant third and Google.
So Amazon's are under a ton of competitive pressure.
At least from an industry standpoint,
everyone's still trying to catch up.
It's the same theme Dave, every year.
Amazon is out front and the lead just gets extended
and extended.
And again, here, no exception.
>> Well the Uber story of course,
there's you mentioned as Andy Jassy
is now taking over a CEO of Amazon,
and you know history would suggest that a lot of times
that companies falter when there's a CEO transition,
but it feels like it's different this time.
Andy Jassy was here since the beginning,
launched AWS versus a profit engine of Amazon,
brought back Adam Selipsky who has a deep understanding.
He's not as technical as Andy,
but obviously as a deep understanding of the business,
yeah, he was comfortable up in the keynote.
It wasn't John, a typical fire hose of announcements.
Even those, a lot of announcements,
they didn't shove them down our throat
and they didn't end the analyst session as well.
Usually in the analyst session it's hours and hours
and hours of firehose Kool-Aid injection, not this year.
Why do you think that is, is that a COVID thing?
Is that a change in?
>> No, I think Adams Selipsky wants to be his own guy
as a leader here.
A lot of things were eliminated from the keynote
that Andy Jassy did.
For instance, Andy Jassy loves music.
So we always had the music,
walk up music like you see in sports, which is very cool.
That's an Andy Jassy kind of tweak.
Andy is all about announcements
and he was just pushing the envelope.
Adam was much more laid back.
He sees, more of a holistic picture,
being more of an app guy being more of a data guy,
less of I will say under the covers nerd like Jassy was,
Andy was very deep on a lot of the tech stuff as is Adam.
But I think Andy a little bit more proactive on that.
So Adam was very much more about
the impact of eight of us culturally,
as a society, as a company,
and kind of brought in this kind of thing
different apple vibe, which is, you know,
the people who are Pathfinders.
As he takes that Jassy kind of approach of leaders,
but be a builder, be a change agent,
be a game changer.
Adam took it to another level by saying,
"Hey, it's okay to be a Pathfinder
because it's net new disruption with the cloud."
And I think that's the story that I see coming out of this,
where in talking to Adam one-on-one
Amazon absolutely has a secret weapon in it's chips,
custom Silicon.
They're absolutely crushing it
with how they're thinking about SaaS and platforms.
And they have a huge ecosystem.
And I think at the end of the day,
and we talked about this in our story on Silicon angle,
Amazon could actually wipe out Microsoft.
And I think Microsoft's core competitive advantage,
has always been their ecosystem and their developers.
I think right now in the next few years,
if Microsoft doesn't match Amazon,
they will be decimated.
>> Wait, wait, hold on.
Amazon's not going to wipe out Microsoft.
Microsoft has too much of a cash cow.
Look at the hanging on to windows,
the mistake and missing mobile initially missing the cloud
didn't wipe out Microsoft.
So they've just got too much of a software cashflow.
That's not going to happen >> A little bit over the top.
but Microsoft has done a great job
and certain can tell it to kind of stay in the game
and do more.
But if you look at the major inflection points Dave,
where's digital equipment corporation?
where's prime computer?
>> I think this is the point is again,
history would show that those companies,
when they handed the reigns over to a new CEO,
failed.
They faltered, it was self-inflicted wounds.
It almost happened.
You thought it would happen with Microsoft,
whether they became irrelevant under Obama,
but when Nadella came in,
he reinvigorated, because specifically
they had the cash flow,
to be able to do that.
Now so the big question is, okay,
"We ran a survey to our community to see
what could disrupt Amazon?"
You know, the, the U.S government wants to break them apart,
or wants to regulate them.
But our survey respondents said there's a 60% plus
probability that Amazon will be disrupted by other factors.
>> And that's really a self-inflicted wound.
>> And that's Jassy, that's right.
Then that's Jassy big challenge,
is how to not make those disruptions,
how to fight those disruptions.
The number one reason why they could be disrupted
was self-inflicted wounds.
Which again, history would show what happened.
But one of the things we talked about is
that normally happens when companies stop innovating.
And they rest on their laurels right?
And you kind of saw that with those companies
that you mentioned,
but you mentioned their secret weapon.
We wrote about that in our article, the chips.
So we heard no secret.
Everybody knew graviton3 was coming, right?
And so that is Amazon secret up.
And you know, I've been thinking about this John,
Amazon makes a lot of money on x86 instances
that they've deployed years ago
and they charge a lot for.
I was wondering,
are the old X 86 instances actually more profitable
than graviton, maybe at this point in time,
but long-term,
Graviton they control their own destiny
'cause they control the hardware and software stack.
And, I bet it allows them to get better negotiating leverage
with AMD and itself.
>> Of course, I mean, Pat Kelsey,
and she talks about this all the time,
but as bad as days in Intel.
If you're not out in the next wave,
your driftwood, I think Intel and AMD and others,
they have purpose built general purpose chips.
They're probably going to be for the lift and shift stuff.
But if you're actually seriously writing software
as an owner on the cloud,
and you want specific advantages of speed and performance,
you're going to want the custom Silicon
that's purpose-built for your application
and write code to that stack.
So I think there's a whole nother level of platform
as a service Dave,
that's kind of coming out of this re-invent,
that I think could be a multi generational trend,
which is, "Hey the cloud is a super cloud or platform."
Look at the rise of snowflake and Databricks.
Those guys are on Amazon.
Like they're super clouds in
and of themselves they're platforms.
They're not appoint SaaS solution.
I think Microsoft in my analysis is,
yeah, they got office 365,
okay Word processing and stuff.
But what other SaaS apps do they have besides silicon server
and other things that are actually being built on there?
And if I'm a developer, you're going to want to go
to the platform,
that's the highest performance for.
>> Office 365.
>> Right? It doesn't mean it's a cash cow,
but how long is that going to last.
>> A long time? I mean, major momentum.
We argue about that later,
but I want to, touch on Graviton3,
because I think that was the big announcement of the day.
25% faster than Graviton2,
at least twice the floating point performance,
twice the crypto graphic performance,
in three times for machine learning workloads,
and very importantly, 60% less power.
So at Amazon scale,
Adam said this in our meeting.
He said, the economics really favor us because of our scale.
And so, they've also announced new training instances
and what having custom Silicon allows Amazon to do,
is release on a much much faster cadence
than traditional x86.
And they could do, and they could do really cool things.
Nitro is their neck, there's smart NEC,
which it says the basis, their new hypervisor, if you will.
So it allows them to bring in x86, Nvidia, NPUs
some of their own or Nvidia GPU,
some of their own Silicon.
So optionality is really the key there.
You heard them announce an SAP instance.
So that's a memory intensive instance.
They can dial things up, dial things down.
They've got full control of the stack.
And by the way,
copying them, Google's copying them,
Microsoft is copying them.
And who's leading this charge and custom Silicon?
AWS, obviously Tesla, apple.
I mean, these are leading companies
that I don't think they all got it wrong.
I think they got it right.
>> The Silicon angle used to have your own custom Silicon.
And that's the clearly the advantage
as it's vertically integrated.
But the other thing that's coming out of this reinvents,
the purpose built software concept,
where, they're not copying Microsoft's playbook
as the wall street journal saying,
and some are saying Microsoft copying Amazon,
Amazon has always been this horizontally scalable resource
that's cloud, but with machine learning and AI,
you now have this purpose-built kind of capability
from software into the app itself,
where data has to be addressable.
And I think the people in the data business
kind of know this, but as the rest of the world
comes out architecturally,
having that horizontal observation space and data
that's vertically tied to machine learning,
is a huge architectural shift.
This is a complete rethinking of how software is built
and that's going to be a game changer.
I think Amazon's well out on front of that.
And I think that's going to be a huge architectural shift.
>> Well, let's quantify this a little bit
because you're making the point that Amazon
is the number one cloud, which I would agree with.
We're talking here about IAS, Infrastructure As a Service
in the past layer that sits on top of that.
Microsoft defines the cloud is we'll put in an office 365.
Google will put in it's Google apps.
Amazon is pure infrastructure service.
And if you just look at that space,
that's about $120 billion business.
When you add up AWS, Azure, Alibaba and GCP.
Which I would contend are the only four hyperscalers
out there.
I don't include Oracle as a hyperscale.
I don't include IBM.
I've got a lot of crap for that sometimes,
but we're talking big scaler, $120 billion.
So actually relatively small,
compared to the trillion dollar opportunity that they have.
But it's growing at 35% a year.
Amazon will do more than 60 billion this year, 62 billion,
just to quantify it in that IAS space.
Microsoft will be about 38, 39 billion.
Okay so pretty substantial.
Those two are far ahead of the others.
Everybody else's, Google is still under 10 billion,
Alibaba is right around there.
So those two it's really a two horse race.
And I asked Microsoft using its software estate.
Amazon's got to be the innovator
and has to have the best cloud to win.
And it does.
>> Well also a platform,
lets go back to a little history lesson,
for the younger folks out there.
When Microsoft was had a monopoly,
they had windows operating system,
which has had DAS under the covers,
but windows was the operating system.
And office was a suite of applications.
They encourage software developers,
to build on top of windows and they had other servers
off SQL server all came out of that small history.
So their bread and butter was to have developers
build on top of windows.
Hence the monopoly,
of course they had the application and the system software,
hence the monopoly, hence the Microsoft breakup
by the government in 1997.
Now today cloud is essentially one big kind of PC concept.
It's like windows.
So windows equivalent.
So cloud is essentially an environment platform,
that has apps that run on top of it.
Okay, in that world,
Amazon by far the number one.
Windows model at Amazon's,
I mean Microsoft's used to is, "Okay,
I got Azure and I got office 365".
That keeps them in business,
that keeps them from losing.
So it's a placeholder.
So that what I'm looking at is what is Amazon?
Amazon versus Azure doing,
relative to ISV and uptake for developers.
And I'm suggesting that this continuing trend of Amazon
will go, if it goes uncontested by Azure,
they'll wipe the table on ISV and suffer developers.
If you're an owner of a software,
you're not going to write software,
that's going to be sub-optimized for a platform.
That's not going to be performing.
>> Unless you're, unless you're a Microsoft developer.
You know the old debt days.
And there are a lot of those.
And that's what, that's what Microsoft is doing.
They've shifted to cloud,
they've gone everything into cloud.
So Azure is their platform for innovation and acceleration.
>> So those developers going to build
a sub optimize application versus going over here on AWS.
>> Well, that's the story with Microsoft good enough.
>> I know again, this is the we're speculating,
but we're going to watch that, but that is to me,
will be the battlefield of what will determine Azure
versus AWS.
And I think everything else is smoke and mirrors,
Amazon webs Webster way ahead of Azure,
but the Tesla is going to be does 80 questions attract
those developers on their cloud with the custom Silicon,
with the integrated stack
and with the purpose-built software.
I mean, it's looking really good.
I think they've got a really compelling story.
>> I think it's less about Azure versus AWS.
I mean, that's an interesting storyline
and I love to talk about it.
But I think go back to 120 billion out of 4 trillion.
That's really the larger opportunity,
for both Microsoft and AWS to continue to grow.
'cause you look at Dell with Apex,
you look at HP with GreenLake, Lenovo, Cisco,
they've all got their own clouds.
One of the things that didn't get into our article,
but Adam Selipsky when you asked him about hybrid
"Is that hybrid cloud?"
When we were talking about some of the stuff they're doing.
He's said, "Look that's not cloud,
what those guys are doing."
"That's not what we did."
And he talked today about edge has to be AWS, not like AWS.
That was the quote to use.
Talk about, private 5g,
bringing out posts.
And he gave some examples of that.
The point is they, AWS is bringing its system,
its architecture to the edge it's programming model.
Infrastructure is code to the edge.
Now Kubernetes does moderate that a little bit,
but his point was, "That's not AWS."
"That's not the cloud."
>> Yeah I think in summary Dave,
had to wrap up what's the big trend this week,
is that Amazon web services,
is a heaven environment for a developer,
for the elite people who want to roll their own.
For the folks in IT.
And these other environments,
you can have prefabricated purpose-built software platform
to build on top of,
and I think that's going to address
that whole ease of rollout.
So if I'm a SaaS developer,
I don't want to rebuild that over again.
I don't want to roll my own.
I'll take what you got.
and connect a good example,
if you want a call center you can take it
and use it and then build on top of it
and iterate on it.
So I think it's more of here's a platform for you,
and take it.
So I think that to me is the big story and that's not..
and think about it.
How many people out there,
a role in their own Amazon,
you've got to be pretty strong at Amazon for millions,
to roll your own.
>> Couple of other quick points that he barely emphasized.
The primitives, the APIs,
the multiple databases,
right tool for the right job,
took a shot at Oracle without mentioning Oracle,
'cause they had sort of one database.
But I will say this is mission critical.
Oracle still owns that.
They talked about a mainframe migration,
tooling and runtime for mainframe compatible runtime.
That's going to allow them to nip at the edges
of those mainframe workloads and Oracle workloads.
If, they're not going to get to the core anytime soon.
They also talked about role level and cell level security.
We think that's the squirrel acquisition from years ago.
And then he made a statement.
We have three X with Redshift price performance
better than any cloud data warehouse
sort of interesting shot
at a snowflake and data breaks.
Anyway...
>> I mean, I think overall,
I thought Adam did a good job.
I think he didn't disappoint.
Okay but.. >> It's comfortable.
>> I think his goal was to get through this
and not have people go well, it's not Andy Jassy.
I thought he did an awesome job,
and he did a good job and he got what he needed to do.
>> He was comfortable and he obviously leaned
on some of his Pathfinder customers.
NASDAQ, I thought was very impressive.
United airlines dish so...
>> Okay Cube coverage,
ninth year of the Cube here at AWS re:Invent,
2021 is the Cube you're watching,
the leader in high-tech coverage, The cube.
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