Adam Selipsky's race comes to an end

Today: AWS taps Matt Garman as CEO, the executive many expected to replace Andy Jassy three years ago, Google Cloud ramps up its TPUs and developer platform, and the latest funding rounds in enterprise tech.

Former AWS CEO Adam Selipsky speaks at re:Invent.
Former AWS CEO Adam Selipsky speaks at re:Invent.

Welcome to Runtime! Today: AWS taps Matt Garman as CEO, the executive many expected to replace Andy Jassy three years ago, Google Cloud ramps up its TPUs and developer platform, and the latest funding rounds in enterprise tech.

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Passing the baton

As he scrambled to explain how AWS planned to respond to the generative AI boom during 2023, Adam Selipsky beat a metaphor into the ground: "We're about three steps into a 10k race," he said, over and over, arguing that in the long run AWS had plenty of time to respond. That might be true, but Selipsky won't see the finish line.

Amazon CEO Andy Jassy, who was the first CEO in AWS history before taking the big job in 2021, named Matt Garman Tuesday as Selipsky's replacement starting in June. Garman is an AWS lifer, the first product manager driving AWS's flagship EC2 service from its inception before taking over the entire compute division in 2016 and transitioning into a sales role in 2020.

  • "Matt knows our customers and business as well as anybody in the world, and has senior leadership experience on both the product and demand generation sides," Jassy said in the announcement.
  • Duckbill Group's Corey Quinn said Garman "has either shaped the organization or been shaped by it to the point where they are indistinguishable."
  • Garman was on everyone's short list to be AWS's next CEO back in 2021, but Jassy said Tuesday that at the time Selipsky was hired "we agreed that if he accepted the role, he’d likely do it for a few years, and that one of the things he’d focus on during that time was helping prepare the next generation of leadership."

Now that Garman has been deemed sufficiently prepared to run AWS, he inherits a somewhat different company and enterprise tech market than Selipsky did.

  • When Selipsky took over in the summer of 2021, his goal was to keep this massive enterprise tech company firing on all cylinders: "Don't screw it up," as Business Insider put it at the time.
  • It's hard to point to anything Selipsky did that derailed AWS, but a year after he took over two outside events changed the course of the market for years to come: The end of zero interest-rate policies and the launch of ChatGPT.
  • In response to the first development, AWS customers pulled back on spending to a degree cloud infrastructure hadn't yet experienced in its short history, and revenue growth slowed dramatically.
  • In response to the second, competitors pounced; especially Microsoft, which thanks to its quasi-acquisition of OpenAI's technology has been in the driver's seat during the early days of generative AI era.

As a result, AWS and Selipsky played defense during the last two years of his three-year run. As AI hype settles down and cloud spending picks up, Garman's job will be to get AWS back on offense.

  • AWS still makes a huge chunk of its money from its basic compute and storage services, which it barely talks about anymore amid the distraction of scrambling to appear like an AI-focused company.
  • Last year Garman reorganized AWS sales to focus on reaching bigger enterprise customers and helping them understand how they can best utilize those services, according to The Information.
  • Microsoft's ongoing cloud security problems are an enormous opportunity for AWS to exploit, which it has already begun to do in earnings calls and keynotes at re:Invent.
  • And given that AWS operating profits nearly doubled during the first quarter, it could be a great time to dissuade those thinking about keeping workloads on premises with some price cuts.

Garman has a mandate for change: "There will naturally be some organizational adjustments that we will make as part of this transition," he wrote in a memo to AWS employees.

  • During the first 15 years of its existence, AWS was the envy of most enterprise tech companies thanks to its ability to execute and its keen understanding of what developers and operations teams needed to succeed.
  • Those days are over; competitors are not scared of AWS anymore, and customers know they have options.
  • Garman's tenure will be judged on whether he can recapture that swagger by the time the next enterprise tech boom comes along.

Meanwhile, at Shoreline…

Most years Google I/O is a conference focused on the search giant's consumer technology, but it rolled out a few new things for the enterprise crowd Tuesday at the Shoreline Amphitheater near its sprawling campus. At the top of the list was Gemini Flash 1.5, a new addition to its Gemini family of generative AI models that was "designed to be fast and efficient to serve at scale," it said in a blog post.

Project IDX, Google's take on an AI-powered IDE, is now available as an open beta weeks after GitHub moved its Copilot Workspace into the technical preview stage. And it launched Trillium, the newest edition of its TPU family that Google claimed will offer nearly five times better performance than the earlier generation of its AI processors.

Google faced its own reckoning with the generative AI boom, but unlike AWS it had an easier time pivoting after developing a lot of the core technology behind ChatGPT in-house years ago. However, Google is pushing customers to use its in-house Gemini models, while AWS is attempting to give customers a range of models to use with its cloud services.

Enterprise funding

Harness raised $150 million in debt financing from Silicon Valley Bank and Hercules Capital, which it plans to use to add generative AI to its CI/CD platform, among other things.

Atlan scored $105 million in Series C funding to help customers make sure they're putting proper governance controls on corporate data.

Datology AI raised $46 million in Series A funding to automate data curation for companies that want to train their own AI models.

RunPod landed $20 million in seed funding to build out its GPU cloud infrastructure service.

The Runtime roundup

Meta shut down Workplace, an attempt to compete with Slack and Microsoft Teams that appears to have been primarily used by Meta.

AWS will no longer charge customers for unauthorized S3 requests, moving pretty swiftly by AWS standards to fix a problem after a customer faced thousands of dollars in charges thanks to another S3 user who chose the same name for their storage bucket.

There are now two exascale supercomputers in operation according to the latest edition of the Top500 list, with the Aurora system from Argonne Leadership Computing Facility joining Oak Ridge National Laboratory's Frontier system.

Microsoft could still face antitrust litigation in Europe even after unbundling Teams from the Microsoft 365 suite, according to Politico.

Thanks for reading — see you Thursday!

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