The Six Five team discusses AWS CEO change.
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Transcript:
Daniel Newman: Adam Selipsky is stepping down as of about what two weeks from now, Matt Garman is in. You know Matt well, you’ve worked with him over the years. What’s your perspective on this?
Patrick Moorhead: So everybody, not everybody, but the instant any senior executive steps down, a lot of questions happen and that’s just natural. And the first thing I do is I go look at the public statements to determine what the story is, and 99 times out of 100, if the prior executive is not quoted in there, then there’s something wrong. They’re either leaving the company, there were improprieties or they were fired suddenly. None of that happened. In fact, there was a three part blog from Andy Jassy, Adam and Matt coming in there, which it seemed very planned to me. And then when I connect this to this off the chain, amazing performance they had the quarter before then it looks more like a plan.
And by the way, Matt may have been in charge of sales and marketing, but this guy is a product guy. Okay, go look at his LinkedIn. He was the first product manager for EC2 and he ran product management and product marketing. He’s a product guy, he’s not a marketing guy, he’s not a sales guy. But to me he had to punch that ticket to give the permission to get the big role. There is a question on whether AWS is gaining AI market share or losing AI market share. It’s really hard to determine if you look at just the overall numbers for AWS, and I think it’d be hard to parse out IaaS from PaaS, but IaaS and PaaS are peanut butter and jelly. I’m okay with that, they gain market share and by the way, Azure in some measurements gained and some they lost. So it is murky as heck because that would be the only thing, if Andy didn’t see the generative AI progress that he was looking for and the company was looking for. Can I tell you one thing though, Dan? I am super-
Daniel Newman: You can tell me more than one.
Patrick Moorhead: I am super excited to see. I always loved Andy Jassy’s, previews of AWS. It was one slide per offering, core value proposition, customer problem they were solving, what their solution was and what the impact. I might be a CEO of an industry analyst company and a couple other co-founder, but I’m a product guy. I freaking love that. That’s exactly what I want to see. I think with Garman coming in, I am hopeful that that’s what we will see. It’s a simplified message that’s about products.
Daniel Newman: Yeah, so I am going to take a little bit of a market approach here and just give a little bit of perspective as to what I think happened. And of course this is all speculation. I mean we never know 100%. First of all, Selipsky did a very good job. This company got onto $100 billion run rate business under his tutelage and being the succession CEO of Andy Jassy, now the CEO of the company, that was not easy shoes to fill because this was his baby. He may be taking on the larger Amazon now and being the CEO of the whole company, but you have to be sure that he’s watching that thing very closely. I’m sure he feels very personally attached to that business and the growth of the business.
Pat, you mentioned about are they gaining, are they not? I actually don’t think it mattered. I do think the out in the decision for the transition had to do with the perception that AWS had fallen behind on AI. It didn’t actually have to do with the fact of whether or not they’re growing or not. I actually believe they’ve done a good job. They’ve done a lot of catch up with AI. They’ve made a lot of good moves, the Anthropic moves what they’ve been able to build in-house with Q. But the perception right now and the market share data is showing that both Microsoft and Google over the past several quarters has gained market share and AWS has somewhat flattened out overall.
Now, some of that market taking actually was from the smaller providers. It wasn’t actually all from AWS and when you look at that closely, but the fact is you are at the rate of growth, meaning just the fact that Microsoft is growing at almost a 2X rate. There’s only a few more quarters before technically speaking, Microsoft will become bigger than AWS. And again, the way Cloud is calculated is opaque. It’s not very clear. We always gave AWS a bit of an advantage because it’s also seen as the true pure IaaS where others were cooking numbers slightly differently.
Bottom line though is AWS can’t fall behind. That will be an absolute damning moment for the company. The change I think had something to do with accelerating it. Also, I can’t help but think it had something to do with the decision not to go all in with DGX and NVIDIA. It was a bold decision. I don’t know that it was the wrong decision for AWS monetarily, but from a perception standpoint when everybody was running to NVIDIA, AWS had to deal with the resistance, ended up changing its tune to some extent later and I think that decision looks like it might have caused a little more consternation with some of the customer adoption, leading more people to move some workloads to Azure and Google as well. So a very interesting moment. Good luck to Matt. Congratulations, Adam. I don’t think people realize what a big job you’ve done and that warrants some consideration.
Author Information
Daniel is the CEO of The Futurum Group. Living his life at the intersection of people and technology, Daniel works with the world’s largest technology brands exploring Digital Transformation and how it is influencing the enterprise.
From the leading edge of AI to global technology policy, Daniel makes the connections between business, people and tech that are required for companies to benefit most from their technology investments. Daniel is a top 5 globally ranked industry analyst and his ideas are regularly cited or shared in television appearances by CNBC, Bloomberg, Wall Street Journal and hundreds of other sites around the world.
A 7x Best-Selling Author including his most recent book “Human/Machine.” Daniel is also a Forbes and MarketWatch (Dow Jones) contributor.
An MBA and Former Graduate Adjunct Faculty, Daniel is an Austin Texas transplant after 40 years in Chicago. His speaking takes him around the world each year as he shares his vision of the role technology will play in our future.
