Welcome to Runtime! Today: why AWS is building an applications business with a specific focus, Microsoft and Google report cloud earnings, and the latest funding rounds in enterprise tech.
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AWS evolved into one of the biggest businesses enterprise tech has ever seen by taking the Home Depot approach; it offers everything companies need to build digital experiences around their businesses, but it's up to you to find it and put it together. However, as the market has shifted, customers started to ask for a little more help.
Dilip Kumar is an Amazon veteran who came over to AWS last year to lead the relatively new Applications group, which builds packages of software tools for companies looking for help in specific areas, such as running a call center or managing customer data. The group started about six years ago with the launch of the Amazon Connect call-center application, and has since added several others that tackle problems around marketing services or supply chains.
In a recent interview Kumar touched on the factors that led AWS into this business, how applications are sold a little differently than developer services, and how AWS thinks about its road map for future applications.
On the history of the Applications group:
Kumar: Every year, AWS, as you know, adds 50 services. In almost every meeting that I go to customers with, there is a level of exasperation; "I just don't know how to combine (these services) and so I ended up using a very small group of services, just EC2 instances, or databases, or some of the analytic services, or S3."
Every (AWS) service, they're targeting their services towards developers. They are intended for developers to be able to build things off of it and that is exactly the right thing for those services to do.
However, in the last few years, there has been an extreme shortage of skilled workers in companies. And in terms of skill sets, hiring has gotten tighter, the ability for people to be able to sort of invest time and energy and dollars in doing in-house development has also reduced. That's the single biggest thing that I can point to.
On Applications as new customer bait:
When you think about our retail vertical, like the identity and checkout stuff, we're actually introducing net new customers to AWS that weren't AWS customers before at all. It's opening up conversations that go beyond CIOs and CTOs to chief supply chain officers and chief marketing officers who have traditionally used other vendors in order to be able to satisfy their needs.
On AWS's plan for future applications:
If you look at the things that we have done to date, in terms of the services that we've offered, they've all had a long history of us doing something very similar with deep expertise for Amazon. That level of expertise and credibility that we can bring to bear that allows us to be able to create something that can (start) a much richer conversation with a customer. You have to match their industry expertise with our capabilities and our own experience.
That has generally resonated with customers because they are looking for things that are more end to end. But rather than saying that we will boil the ocean with a very broad offering that is so broad but it's only like an inch deep, we tend to be specific, and then build those over time as we sort of glean customer demand.
A tale of two clouds
Earnings season for enterprise tech powerhouses kicked off Tuesday, and Microsoft and Google are heading in opposite directions after the release of the numbers.
Microsoft beat expectations across the board for revenue and profit, and revenue growth of its "Azure and other cloud services" group — which it still refuses to spell out in detail — increased to 29%. It also issued guidance for the current quarter that came in above analyst estimates, and its stock rose as much as 4% in after-hours trading.
Google Cloud, on the other hand, missed expectations for revenue growth with a 22% jump during the quarter. That disappointed investors after what was an otherwise solid quarter for Google's advertising business, and sent its stock down nearly 5% in after-hours trading.
The mixed results make it hard to tell if enterprise tech spending is still in the doldrums, or if Microsoft just had a much better quarter than Google. Amazon reports earnings on Thursday.
Island raised $100 million in Series C funding to continue its work on an enterprise-friendly web browser designed for security and, well, workplace activity surveillance.
SecureW2 landed $80 million in new funding to help companies implement passwordless login systems using their existing identity management vendors.
MangoBoost raised $55 million in Series A funding for its take on the DPU, a combination of hardware and software that helps companies offload networking workloads from the CPUs and GPUs in their data centers.
The Runtime roundup
Databricks purchased Arcion Labs, which makes a fast data replication tool, for $100 million.
EnterpriseDB acquired Splitgraph, which offers a serverless data-access service compatible with EnterpriseDB's PostgreSQL database, for an undisclosed amount.
1Password was also affected by the customer-service breach at Okta disclosed last week, detecting "suspicious activity" that fortunately didn't result in the loss of any customer data.
SiFive, one of the leading torch bearers for the open source RISC-V chip architecture, laid off over 100 employees amid worries of "rapidly changing semiconductor end markets."
After complaints from residents, AWS cut the noise level emanating from one of its massive data center complexes in Manassas, Va., in half, but the neighbors still want it to do more.
Thanks for reading — see you Thursday!