The Big Story

The cloud that changed everything

Only in a handful of moments this century could you see the very direction of the tech industry change, and the launch of Amazon S3 on March 14, 2006, makes that list.

It was the birth of a service, an enormously profitable company within a company, and a seismic shift in the economics of doing business on the internet. Cheap, always available and seemingly unlimited data storage unleashed a torrent of innovation not only in the enterprise, but in the mobile applications that would start to take over the world just a few years later after the launch of the iPhone.

Services like S3 unlocked a frenzy of entrepreneurial activity. Cloud computing was a key factor in the exploding app economy.

• S3 (and the EC2 compute service that followed later that year) completely changed the math behind starting a new tech company.
• Entrepreneurs could try out ideas and refine them without having to shell out big money up front for computing resources.
• Cloud storage and computing were also perfect complements for ever-faster mobile networks. Social networks, ride-hailing apps and new business tools depended on the combination.

Amazon now has neighbors in the cloud. Jeff Bezos has frequently marveled at how long AWS had the market practically to itself. But Microsoft, IBM and others eventually took notice.

• Microsoft has retooled its entire company around cloud services, and investors have applauded.
• Likewise, Google appears more serious than ever about the cloud opportunity.
• The other big enterprise players in 2006 … still have not figured it out. But neither have they vanished. Their slow-moving customers may still buy them time.
• The Big Three dominate core cloud infrastructure, which requires huge levels of capital investment. But dozens of startups are building higher-level enterprise computing services that will define the next 15 years of this industry.

The past is prologue. In general, people in technology don't spend a lot of time looking at the past, preferring to focus on inventing the future. Still, anniversaries have meaning: They let us appreciate just how much the world has (or hasn't) changed.

• In 15 years, AWS will be roughly as old as Oracle was when S3 arrived. If no one has managed to dislodge it, it could be one of the most powerful enterprise technology companies yet created.
• To maintain its advantage, AWS is going to have to navigate past what Microsoft CEO Satya Nadella calls "peak centralization." That will require meeting customers where they are.
• At some point, AWS needs to figure out how to make it easier for customers to integrate its own services. Customers sometimes say they feel as if they were built by completely separate companies.

Change is coming. AWS has had one leader, Andy Jassy, for its entire history.

• In July, he's set to take over the parent company as Bezos becomes executive chair. A successor hasn't been named yet. That decision could have as much impact on the next 15 years as S3 had on its first 15.

— Tom Krazit

A MESSAGE FROM SEAGATE

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This Week On Protocol

The robots are coming: Robotic process automation saw a surge in usage during the pandemic. Now, Google Cloud is teaming up with Automation Anywhere to develop a suite of products targeted at specific industries like financial services that will enable users to deploy RPA right out of the box. Google Cloud is the laggard in this space: Last year, Microsoft purchased RPA provider Softomotive and AWS has a partnership with UiPath that's similar to Google Cloud's new initiative.

AI research race: It's not surprising that tech giants like Facebook and Google dominate AI research. But startups are now trying to challenge that dominance. The goal is to go deeper, not broader, focusing on specific topics like natural language processing. Asapp is one of those. A burgeoning player in the battle to digitize the call center, it's been able to pull talent from some impressive places and notch a few major wins since launching in 2014.

The dream of enterprise XR: Companies have been slowly testing out how mixed reality can be used within their own operations. Protocol's Kevin McAllister asked our Braintrust to weigh in on which industries could see the biggest impact from the technology.

Coming Up This Week

March 16: SXSW kicks off. The tech track for this year has loads of great sessions exploring issues like diversity in the field and responsible AI. One standout is Amazon CTO Werner Vogels interviewing Twilio co-founder Jeff Lawson. Also Tuesday: Coupa reports earnings (see our profile of CEO Rob Bernshteyn).

March 17: The Senate Foreign Relations Committee holds a hearing on how the U.S. can remain competitive with China. It comes after a recent report authored by tech industry leaders said the U.S. is falling way behind in the AI arms race.

Around the Enterprise

• Microsoft is reportedly examining whether the recent Exchange hack was an inside job. The company is looking into whether a security partner leaked information on the vulnerabilities before it was able to release the patch, according to The Wall Street Journal.
• In a decision that is angering some lawmakers given the recent hacks, Microsoft is also poised to get a huge chunk of COVID-19 relief funds intended to prop up U.S. cybersecurity, according to Reuters.
• VW is spending $30 billion on tech investments and partnerships. But digital transformation is as much a cultural overhaul as it is about the adoption of new technology, and the shift is proving challenging, Bloomberg reports.
• Noted AI researcher Fei-Fei Li is joining the board of Nimble Robotics. She was a seed investor in the company, which just scored a $50 million funding round.
• ServiceNow released new low-code development tools. Expect them to be a big focus for the company, as we mentioned in our profile of CEO Bill McDermott.
• Not all was lost at French cloud provider OVH. Some data will likely prove to be permanently lost, but some luckier customers will get their data back, the company said.

A MESSAGE FROM SEAGATE

Could Your Business Use 1PB of Free Cloud Storage?

Register now and attend Seagate Datasphere 2021 Virtual Event for a chance to win a massive 1PB of Seagate Lyve Cloud storage for your business.

We've got an incredible lineup of industry experts who will discuss the most formidable challenges regarding enterprise data storage.

Register Now