Andy Jassy

Most people still think of Amazon primarily as an online retailer, but the elevation of Andy Jassy to take over from Jeff Bezos as CEO provides further evidence for the strategic importance of Amazon Web Services (AWS) within the Amazon group.

AWS was launched in 2002 and relaunched in 2006. In March 2008, Om Malik published an interview with Ray Ozzie, then the Chief Software Architect at Microsoft, which included some positive comments about AWS. By the end of the year, both Google and Microsoft had announced rival cloud computing offerings. As far as I can see, cloud computing first appeared as an Emerging Technology on the Gartner Hype Curve (it's not a cycle) in 2008, reaching the Peak of Inflated Expectations by 2009.

During that period, I was a software industry analyst, calling out Jeff Bezos and Ray Ozzie as two of the most visionary players in the industry. My colleague Lawrence Wilkes wrote a long report on AWS in 2004. (But the hype around cloud computing took off later, and the broader awareness of AWS is comparatively recent, so I'm not convinced that the classic hype curve applies to this topic.)

Alongside the news of Jassy's elevation, today's tech press also reports that Google Cloud is still making massive losses. So much for the Slope of Enlightenment then.

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Jasper Jolly, Bezos leaves Amazon in its prime – keeping it that way is the task (The Guardian, 3 February 2021)

Kieren McCarthy, So Jeff Bezos is stepping back from Amazon to play with his space rockets. Who's this Andy Jassy chap? (The Register, 3 February 2021)

Om Malik, GigaOM Interview: Ray Ozzie (GigaOM, 10 March 2008)

Ron Miller, What Andy Jassy’s promotion to Amazon CEO could mean for AWS (TechCrunch, 2 February 2021)

Simon Sharwood, Google's cloud services lost $14.6bn over three years – and CEO Sundar Pichai likes that trajectory (The Register, 3 February 2021)

Lawrence Wilkes, Amazon and eBay Web Services - The new enterprise applications? (CBDI Journal, October 2004) 

Related posts: Jeff Bezos and Ecosystem Thinking (February 2004), Amazon and eBay (August 2004), Internet Service Disruption (November 2005), Ray Ozzie (March 2008), Utility Computing and Profitability (March 2008)

Also Technology Hype Curve (September 2005)

Calculating the Potential of Cloud Computing

A recent Bain and Company report claims a number of insights about the move to cloud computing

• Enterprises are realizing only 35% of the value from their workloads already in the cloud. 
• Leading enterprise cloud adopters have migrated nearly two-thirds of their workloads to the cloud, yet the average company has only 18% there. 
• Up to 50% of the value of cloud investments is predicated on streamlining and improving company operations.

How do they calculate that, asks IanCohen (@coe62)

The Bain report asserts some analysis and shows some graphs, but doesn't explain its calculation. The evidence cited comes from a survey of future intentions, together with a couple of IDC reports on the benefits achieved by an unstated (presumably very small) number of companies from some very specific technological changes (implementing Salesforce, replacing AWS). This doesn't appear to be a vast amount of relevant historical data.

Elsewhere, a 2011 survey for the European Commission estimated that, as a result of the adoption of cloud computing, 80% of organisations reduce costs by 10-20%. A similar figure is quoted in a KPMG paper published in 2014.

Calculating the potential of cloud computing presumably means projecting forwards from historical data (how much has already been achieved) to estimating the future opportunity (how much remains to be achieved). This kind of calculation typically makes a number of simplifying assumptions.

• For example, when a typical organization has moved 20% of its workflow to the cloud, it has realised 20% of the potential benefits. 
• Furthermore, the 20% of organizations that have moved 20% of workflow to the cloud are assumed to be similar to those that haven't.

Based on these assumptions, we could estimate the remaining benefits for the remaining organizations by simple multiplication.

However, both of these assumptions are implausible. Obviously the projects that are carried out are not selected at random, but are precisely the ones that have the highest payoff and the highest confidence level, so we shouldn't expect all potential projects to have the same payoff as the actual projects. 

More importantly, the people making the technology adoption decisions don't have this expectation. Nor are they likely to be persuaded by a graph, however beautifully drawn. However, if they want to adopt Cloud Computing for other (strategic) reasons, a few white papers like this may provide some intellectual cover.

Meanwhile, the European Commission sees Cloud Computing as a way of both reducing ICT costs and increasing ICT jobs. I don't see how companies are supposed to employ more people without increasing costs, but then I'm not a politician.

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Syed Ali, Steve Berez, Paul Callahan and Vishy Padmanabhan, Tapping Cloud’s Full Potential. (Bain and Company, 2015) A downloadable version of the study is available here (8 pp, free no opt-in).

Jeff Atwood, Hardware is Cheap, Programmers are Expensive (December 2008)

Louis Columbus, Tapping Cloud Computing's Full Potential (Forbes, May 2015)

European Commission, Unleashing the Potential of Cloud Computing in Europe (September 2012). See also European Cloud Computing Strategy.

KPMG, Cloud Economics: Making the Business Case for Cloud (2014)


Updated 25 May 2015

The Dynamics of Hype

A common feature of technology hype is the shifting relationship between signifier (a word or phrase) and signified (what the word is supposed to mean). Technology concepts may emerge slowly through a complex social process; the sociologist Bruno Latour refers to these emerging concepts as Black Boxes.

I found the following observations in a discussion of the hype around "nanotechnology".

• The relationship between the signifier and the signified can change over time.
• People can argue about what a signifier means.
• Signifier-signifed relations can be political.
• One sees an ideological landscape of explicit and implicit assumptions, with much competition to establish definitions.

 Encyclopedia of Science and Technology Communication Vol 1, p 487

 edited by Susanna Hornig Priest, Sage 2010.

The Encyclopedia makes the point that "nanotechnology" is an emerging technology - incomplete and with unclear consequences (ibid p 486) and identifies "nanotechnology" as a polysemic or multivalent signifier: in other words, the same thing can mean very different things to different people.

What the Encyclopedia says about "nanotechnology" is true of many technologies, especially those that are most overhyped: at present, these would include Big Data and Cloud.

Innovative concepts typically go through some or all of the following phases.

1. People starting to talk about the concept. (Assertion)

2. Other people rejecting the concept as meaningless, dangerous and/or unnecessary, while trying to bundle it together with earlier concepts. (Denial)

3. Vendors trying to attach the concept to a wide range of new and existing products. (Divergence)

4. Some common understanding may emerge as to what the concept really means. (Convergence)

5. A split appears between a narrow purist interpretation of the concept and a broader more ambitious interpretation. (Divergence)

6. Several different industry groups develop alternative definitions. Subcategories emerge. (Convergence/Divergence)

7. Vendors produce deliberately confusing statements, wishing to show both that they confirm to the standard(s) and also differentiate themselves from the standard(s).  (Divergence)

8. The concept only stops changing its meaning when it ceases to be interesting. (Convergence/Death)


By the way, denial often follows Kettle Logic. That concept doesn't make sense, and even if it did it wouldn't be technologically feasible, and anyway we already have a perfectly good word for it and lots of people are already doing it so we don't need a new word.


If you compare the Gartner Hype Curve (it's not a cycle) from one year to another you will see some of the consequences of this shifting and subdividing terminology. For example, Thoran Rodrigues notes that different cloud technologies are in different points of the curve and wonders about the shifting positioning of Cloud Computing from one year to the next. (The cloud's place in the hype cycle, Tech Republic Sept 2012).

The Gartner Hype Curve (it's not a cycle) is supposed to track hype rather than reality, so we may suppose that it describes the trajectory of the signifier rather than the signified. There are many terms that have become discredited or unfashionable, but the underlying technologies have been quietly adopted by many large organizations. Conversely, there are many terms that are still "hot" but whose adoption is problematic. What Gartner's Hype Curve (it's not a cycle) fails to explain is the evolving relationship between the signifier and the signified.


Updated 29 July 2014

What is Technology Maturity?

@madgreek65 asks whether cloud computing is "mature", and whether it matters (What the masses are missing about the cloud).

I suggest that there are several characteristic features of a technology or product, indicating whether it is mature or immature.

	Immature	Mature
Product Stability	Subject to frequent and significant improvements. In a state of "permanent beta".	Stable. New releases are fairly predictable upgrades.
Conceptual Stability	Terminological disputes. Disagreements as to what the technology is "all about".	Terminology "taken for granted".
Technology-in-use	A small number of early adopters trying ambitious stuff. Little consensus about how the technology should be deployed and used.	A large user community doing similar stuff. Use of the technology has become standardized "best practice".
Growth	Large untapped market. Rapid growth possible, under favourable conditions.	Relatively little scope for further growth.
Metrics	Absent or unreliable	Systematized
Adoption Risk	High	Low
Adoption Benefits	Potentially high	Moderate

This notion of technological maturity has the following consequences.

1. It is unrelated to quality or value. A mature technology or product can be unimaginative, boring, almost obsolescent, whereas an immature technology can be visionary, exciting in conception and engineered to the highest standards.

2. Maturity is as much to do with the community of users (technology-in-use) as about the designed products (technology-as-built).

3. The adoption roadmap for an immature technology may be rather complicated. One of the main reasons for this is that the adoption programme needs to bridge the gap between technology-as-built and technology-in-use. There is also a common preference for a cautious stepwise approach - pilot projects, proof of concept and so on. But the stakes can be much higher.

As Mike points out, for any technology that is in the hype phase, there is a lot of resistance to change, and this is certainly true for cloud computing. Mike suggests that a lower-risk adoption approach will win over the sceptical.

"The reason why I encourage those who are pessimistic about the cloud to try one of these low risk scenarios is once they see how easy it is, how productive they can be, and how inexpensive the project will be, then maybe they will see the value and investigate further."

For many people, this is the preferred approach for an immature technology. However, there are some specific risks associated with a slow adoption curve, which I shall discuss in a future post.

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See also previous post: CEP and technological maturity

Confusing Expenditure and Investment

@jpmorgenthal offers A Better Metric for Analyzing the Value of the Cloud.

I agree that the concepts of ROI (return on investment) and TCO (total cost of ownership) don't really work. One reason is that they confuse expenditure with investment, and ownership with use.

Proper investment is what people like Warren Buffett do - buy a railroad in the hope that it will increase in value. Real estate investors may buy a plot of land, build something on the land, and then hope to get their money back by selling or renting the units.

Buying a car isn't an investment, even if the car salesman says it is, unless you are buying a rare antique vehicle that will appreciate in value. Buying IT is like buying a car - you want a car because it's going to be faster than walking and more convenient than taking the bus. You think about the purchase cost and the running cost, and you consider how much you can afford.

Depending on your lifestyle, you might decide that it works out cheaper to rent a car when you need one, than to own and pay parking charges for a car that sits idle most of the time. Alternatively, if you drive to work every day, it might be a lot cheaper to own your own car. In this context, the purchase of a car might count as an "investment", justified in terms of cost-saving.

Using The Cloud is like having a fantastically good public transport system, so you don't need to buy your own car. The city authority invests in public transport so you don't have to. The private citizen doesn't invest in public transport, just spends money when he uses it. Isn't this what the Cloud is like?