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power, twinned with development
of faster telecommunication
networks, foster new business
models that were not possible as
recently as a decade ago.
Going back to the early days
of computing, large mainframe
computers sat in enormous,
room-sized metal cabinets, and
anchored local networks with end
user terminals. As Moore’s Law
progressed, computers became
cheaper and more powerful, but
most importantly physically smaller.
This heralded the era of personal
computing, with machines appearing
in enterprises, homes and ultimately
pockets and palms.
With the advent of the Cloud, we are
at another critical juncture, where
computing workloads are moving
away from the enterprise and the
home, back to a centralised structure.
This is a profound change that
should be thought of as the digital
transformation of an enterprise.
Amazon Web Services (AWS) is
the current market leader in the
Cloud computing market and
although now a household name,
it came from humble beginnings.
In 2000, Amazon was still a young
ecommerce company struggling to
achieve scale. The company had to
make substantial investments in
FE TRUSTNET
[ BAILLIE GIFFORD ]
14 / 15
With the advent of the Cloud,
we are at another critical
juncture, where computing
workloads are moving away
from the enterprise and the
home, back to a centralised
structure
its internal systems to cope with this
growth which conveniently laid the
foundations for what would eventually
become AWS.
Mr Bezos’s preference for spending
most of his time “living in the future”
has already been mentioned. AWS is a
prime example of the benefits of such
prescience. An ecommerce start-up
like Amazon should not have been able
to challenge the traditional IT giants
at data storage, but on-premise storage
giants like Oracle and SAP failed to
find ways to adapt their business
model to embrace Cloud. Amazon’s
nimbleness, adaptability and future-
thinking has resulted in AWS, yet
another exemplary Amazon business.
AWS now leads the global Cloud
market with around 35 per cent share,
more than its next four competitors,
Microsoft, Google, IBM and Alibaba,
combined. The business is only 10 per
cent of Amazon’s sales but it accounts
for over 50 per cent of operating income
and is growing at a faster rate than the
company as a whole. The transition
to the Cloud is still in its infancy, with
recent market analysis suggesting the
global Cloud market could rise six-
fold by 2025 to $1.25 trillion from over
c.$200 billion at present. Broadly, there
is scope for any of the tens of millions
of enterprises around the world to
leverage the benefits of Cloud, so the
opportunity is suitably gigantic.
In our meeting, Bezos got most
enthusiastic about databases. He
thinks that the advantages of a
Cloud-based system are big enough
for corporates to consider switching.
At the very least it seems unlikely
that any startup today would tie
themselves to the legacy Oracle
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