And, while Graviton2 has been a significant success thus far (48 of the top 50 AWS EC2 customers have already adopted it), the AWS Chips team was already learning from what customers said could be better, and announced Graviton3 this past December,” said Jassy. Jassy said Amazon’s chip innovation with Graviton2, which provides up to 40 percent better price-performance than the comparable latest generation x86 processor, will continue to push foward in 2022. Additionally, businesses are seeking multiple form factors such as fixed instance sizes, portable containers, serverless functions, along with a slew of networking capabilities-all of which AWS can provide, he said. In highlighting AWS’ cloud success, Amazon’s CEO added that there’s “a lot more to compute than just a server.”Ĭustomers today are demanding various flavors of compute such server configurations optimized for storage, memory, high-performance compute, graphics rendering, machine learning. ‘A Lot More To Compute Than Just A Server’ “This shift by so many companies (along with the economy recovering) helped re-accelerate AWS’s revenue growth to 37 percent year over year in 2021.” “Many concluded that they didn’t want to continue managing their technology infrastructure themselves, and made the decision to accelerate their move to the cloud,” said Jassy. Jassy said AWS is playing a major role in “enabling business continuity” during the COVID-19 pandemic and will continue helping millions of customers when demand spikes or diminishes thanks to AWS’ elasticity capability to scale capacity up and down quickly. Jassy, the former CEO of AWS, highlighted major accomplishments in the letter to shareholders as well as his strategy and vision for Amazon and its AWS cloud business. “When it’s clear that we’ve launched something that won’t work, we make sure we’ve learned from what didn’t go well, and secure great landing places for team members who delivered well-or your best people will hesitate to work on new initiatives.” Nobody likes this part, but it comes with the territory,” said Jassy, who became president of CEO of Amazon in July. “If you invent a lot, you will fail more often than you wish. Operating margin estimates for AWS are alarmingly falling faster, Thill noted, with AWS operating margin estimates for 2023 slashed by 27% compared to where they were in February 2022.Amazon CEO Andy Jassy took a deep dive into the strategy and strengths of his company in his first-ever annual shareholder letter as CEO, highlighting Amazon Web Services, hiring inventors and how to “brace yourself for failure.” Thill's analysis shows 2023 sales estimates for AWS continue to decline, with projections currently 12% lower than they were in February 2022 and 5% lower compared to the start of the year. Given AWS comprises the vast majority of Amazon's operating income, a stabilization in cloud is crucial for shares to outperform." "AWS estimates continue to contract, with consensus implying year over year growth troughs in 2Q23. "Slowing cloud demand remains a key concern as businesses shift focus from accelerating cloud migration to optimizing cloud costs," Jefferies analyst Brent Thill wrote in a client note earlier this week. Stabilizing the AWS business is mission critical in the minds of Wall Street. Amazon CEO Andy Jassy speaks during the New York Times DealBook Summit in the Appel Room at the Jazz At Lincoln Center on Novemin New York City.
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