Protocol Cloud: AWS has an Amazon problem

Number of the Week

300 million

That's how many daily users Zoom reported having last week, which I repeated here in this section. Turns out, Zoom actually has 300 million "daily meeting participants," which is a very, very different metric. The company quietly changed the wording of a blog post using the figure without telling anyone.

The Big Story

Disagree and eject (then repeat?)

AWS dominates cloud infrastructure computing for many reasons, one of the biggest being that it practically invented the concept. But another important reason for its success is the formidable collection of tech talent it's assembled to drive its services forward.

The cloud leader lost a notable member of that roster last week when Tim Bray, a prominent AWS software engineer with an impressive background, quit after Amazon fired employees who had advocated for better working conditions for the people scrambling to fill pandemic orders in its warehouses.

• In a blistering blog post, Bray explained that "it was clear to any reasonable observer that [those employees] were turfed for whistleblowing ... It's evidence of a vein of toxicity running through the company culture."
• "I choose neither to serve nor drink that poison," he wrote.
• Bray took care to separate AWS's culture from Amazon's, though: "[AWS] treats its workers humanely, strives for work/life balance, struggles to move the diversity needle (and mostly fails, but so does everyone else), and is by and large an ethical organization. I genuinely admire its leadership."

Amazon plans to invest almost all of the operating profit it expects to generate in the second quarter — somewhere around $4 billion — to improve working conditions within its distribution facilities amid the pandemic. But that didn't satisfy Bray, who didn't respond to a request for further comment on his post.

• "Amazon is exceptionally well-managed and has demonstrated great skill at spotting opportunities and building repeatable processes for exploiting them. It has a corresponding lack of vision about the human costs of the relentless growth and accumulation of wealth and power," he wrote.
• This is a symptom of larger problems within American capitalism, in his view, but "the big problem isn't the specifics of COVID-19 response. It's that Amazon treats the humans in the warehouses as fungible units of pick-and-pack potential," he wrote.
• Yesterday Amazon confirmed that an employee at its Staten Island, New York facility who was working on site until April 5th died of COVID-19.

There's a deeply unoriginal idea that tech reporters love, where they write about how AWS should just split off from Amazon.

• Most of that discussion has centered around customers: Is AWS affected by a reluctance among businesses in competition with Amazon to fund one of their biggest existential threats?
• Amazon's impact on AWS employees is different. Amazon doesn't break out how many people work for AWS, but over the last several years the division has operated more or less autonomously, with CEO Andy Jassy going so far as to call it a "separable business."
• But Bray's public exit is an alarm bell for high-paid AWS employees that will force them to think about their role in a machine that has reshaped the U.S. economy by working its low-paid distribution staff harder every year.

Competition for cloud-computing talent has never been hotter: Silicon Valley stalwarts like Google, Facebook, and countless others have been setting up offices in Amazon's backyard for years, hoping to poach some of the Seattle-area people that made AWS the most powerful modern enterprise tech company. No one will be returning to those offices any time soon, which could make it easier than ever to switch teams.

• So a big question now: Is Bray the lone exception to Amazon's famous "disagree and commit" corporate value? Or is he the canary in the coal mine?

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Question Time

I'm thinking about shamelessly stealing borrowing an idea from my colleague Biz Carson's new Protocol Pipeline newsletter on startups and venture capital: a recurring section in this newsletter in which I pose five questions to a member of the cloud community and publish them here. Interested in participating? Just reply to this email, or email cloud@protocol.com.

This Week In Protocol

Quantum leap: We published a comprehensive look at the state of quantum computing this week with our first Protocol Manual, a collection of reports that explain the potential of quantum computing and the struggle to make it work. In my contribution, I examined how some of the first companies that want to take advantage of the power of quantum computing will likely do so through the cloud.

Bullish on cloud: Wall Street was once Silicon Valley's favorite market, a collection of companies hungry for faster and more capable computers every year — but most financial services companies were skeptical about the cloud. Only recently has that started to change, and the pandemic is forcing companies dependent on outdated tech infrastructure to rethink their approach.

Capping expenditures: Both Amazon and Microsoft reported earnings after the arrival of last week's Protocol Cloud, and for the most part, their cloud units continue to post excellent results. Microsoft noted that supply chain disruptions in January forced it to reduce capital expenditures on building out its cloud network by more than it had hoped — which could account for some of the capacity issues suffered by Azure as the pandemic took hold.

Around the Cloud

• Cloud infrastructure spending grew 34% in the first quarter to $31 billion, according to Canalys — but growth is slowing and nobody is sure what to expect during the current quarter.
• IBM held its first big event since Arvind Krishna became CEO earlier this year, and used it to announce new services based around hybrid cloud and artificial intelligence.
• Meanwhile, Paul Cormier, the new CEO of Red Hat — IBM's $34 billion bet to help its hybrid cloud strategy — told The Register "We don't participate in [IBM's] culture. It's that simple."
• Atlassian earnings beat Wall Street analyst expectations, but investors didn't appreciate the company's outlook.
• Amazon S3 is the granddaddy of all cloud infrastructure services, and the storage service is still very widely used, But BackBlaze wants to carve out some room for its own cloud storage service by making it easier to move data out of S3 and onto its servers.
• Speaking of S3, how about a little something to celebrate it? A Cloud Guru's Forrest Brazeal fended off the quarantine blues with a love song to the venerable service: "I know you are the one for me / With eleven nines of certainty."
• Capital One is a notable exception to the financial services companies that hesitated to embrace cloud services. But after an embarrassing data snafu last year it's bringing in Goldman Sachs' Andy Ozment to lead its technology risk group.
• Cockroach Labs raised $86.6 million in new funding as database buyers continue to like its hybrid cloud approach.
• I missed this among the flurry of earnings announcements last week: Facebook said it would slash infrastructure spending in 2020, pushing as much as $3 billion of its data-center investments to 2021.
• Nvidia continued its expansion into the enterprise market, acquiring Cumulus and its networking software just a week after closing its huge deal for Cumulus partner Mellanox.
• VMware announced plans to cut executive salaries and freeze employee salaries as it prepares for a slowdown in customer activity during the second quarter.
• And Nutanix announced that it will furlough 1,500 employees in two batches over the next few months to save money, but emphasized that its hyperconverged infrastructure services will remain at normal levels.
• A DevOps conference held in Animal Crossing? Yes, a DevOps conference held in Animal Crossing.