'Very few companies will own their own data centers,' says AWS CEO Andy Jassy.

Mitch Wagner, Executive Editor, Light Reading

June 21, 2016

3 Min Read
AWS CEO: Enterprise Data Center Is Doomed

Enterprise data centers are on their way to becoming rare beasts, as nearly every enterprise is going to move nearly all their computing to the cloud, Amazon Web Services CEO Andy Jassy said Tuesday.

"In the fullness of time, whether it's ten years or 20 years, very few companies will own their own data centers, and those that do will have a smaller footprint than they have now," Jassy said during a presentation at the AWS Summit in Washington, D.C. and streamed live.

The transition will lead to qualitative changes in the enterprise, Jassy said.

Data won't just inform decisions, it will drive decisions, Jassy said. That's already happening with enterprises that have already gone all in on cloud.

For example, the Financial Services Regulatory Authority (FINRA), an independent securities regulator, collects 75 billion market events daily, Jassy said. And Philips HealthSuite analyzes 19 petabytes of patient data, looking for similarities in an anonymized fashion to help healthcare providers make better decisions.

Netflix Inc. (Nasdaq: NFLX) uses data to predict whether a proposed series will be successful, looking at the director's track record and customer reaction to the director and actors. And then Netflix promotes the series directly to customers that watch similar streams, as determined by data. (See What's Next for Netflix .)

An all-cloud IT infrastructure will allow enterprises to make decisions on new products and services based on the kinds of IT services available, rather than the extent of the available IT infrastructure, Jassy said -- or, as he put it, "New products and services will be built by service and not server." Amazon Web Services Inc. launched 514 new features and services in 2014, and 722 last year. That's fast innovation, compared with on-premises IT infrastructure, which "moves at a glacial pace" and "doesn't change very much," Jassy said.

"When you use AWS you wake up every day and there is an average of a couple of new services and features that you can choose to pay for or not pay for," he said.

On a related note, the cloud leads to democratization of new technology. When companies rely on on-premises equipment, most people and organizations have to wait years to get it. Now, new services and capabilities are immediately available.

Want to know more about the cloud? Visit Light Reading Enterprise Cloud.

Consider machine learning: Before Amazon had access to cloud services, it built a tool to determine the gender of names, and dedicated a team to that project for months to achieve 90% accuracy. With machine learning in the cloud, a single person with no experience in machine learning was able to achieve the same goal in 20 minutes.

And the cloud encourages improvement in the rate of innovation. With on-premises IT, it takes ten to 18 weeks to get a new server online, which constrains innovation and makes failure expensive. To innovate, you need to try a lot of experiments and be willing to fail, so you need ways to limit collateral damage. The cloud provides that limitation -- resources devoted to failed experiments can be reused on other projects, or simply canceled. Collateral damage of failure becomes minimal, Jassy said.

Tuesday's public presentation was Jassy's first since taking on the title of CEO of AWS in April. At that time, Amazon said the new title was not a promotion, because Jassy had previously been running AWS as SVP. (See Amazon Names AWS & Consumer CEOs.)

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— Mitch Wagner, Follow me on TwitterVisit my LinkedIn profile, Editor, Light Reading Enterprise Cloud.

About the Author(s)

Mitch Wagner

Executive Editor, Light Reading

San Diego-based Mitch Wagner is many things. As well as being "our guy" on the West Coast (of the US, not Scotland, or anywhere else with indifferent meteorological conditions), he's a husband (to his wife), dissatisfied Democrat, American (so he could be President some day), nonobservant Jew, and science fiction fan. Not necessarily in that order.

He's also one half of a special duo, along with Minnie, who is the co-habitor of the West Coast Bureau and Light Reading's primary chewer of sticks, though she is not the only one on the team who regularly munches on bark.

Wagner, whose previous positions include Editor-in-Chief at Internet Evolution and Executive Editor at InformationWeek, will be responsible for tracking and reporting on developments in Silicon Valley and other US West Coast hotspots of communications technology innovation.

Beats: Software-defined networking (SDN), network functions virtualization (NFV), IP networking, and colored foods (such as 'green rice').

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