AWS eyes IoT for the second $10 billion

At the AWS Summit in London today the public cloud giant indicated a strategic move towards IoT may be necessary to maintain its impressive growth.

It’s amazing to think in 2005 AWS didn’t exist as an organization, though the company is now one of the most influential and recognizable names in the technology industry, but will the acceptance of cloud be its reality check?

As AWS has grown as an organization, the normalization of cloud has grown with it. Whilst this would almost certainly be perceived as a positive for the industry on the whole, it could be seen as a double edged sword for the cloud giant. At Cloud & DevOps World, Hotels.com CIO Thierry Bedos predicted as the cloud becomes more an everyday concept, more cloud providers will appear, loosening AWS’ influence on the sub-sector.

Could IoT be the answer for future growth?

Although the company’s heritage and primary focus will continue to be cloud, there are hints AWS will have to find a new hymn sheet to appeal to the mass market, as buying decisions lean closer and closer to price as more providers become available. It took 10 years for the company to reach $10 billion in annual revenues (the team anticipate this year it will exceed the barrier following a healthy Q1), with competition eroding market share for the established players, a focus on IoT could be the answer for the second $10 billion.

“The general acceptance throughout the industry is there is going to be an explosion within the IoT sub sector, which will be heavily connected to the cloud,” said Ian Massingham, AWS’ Chief Evangelist for EMEA. “IoT is here, and it’s here to stay.”

This is not a new claim, but it does offer a glimpse of what the future might hold for AWS. The IoT market is already congested and advancing quickly, though AWS is one of the organizations which has the reputation capable of cutting through the traffic based on the reputation and footprint it has generated through its cloud exploits over the last ten years.

“This morning we heard a prediction that any device which is capable of power will become a connected device in the future,” said Massingham. “The steps being made in the world of technology is meaning chips are becoming smaller, and the cost of delivering connectivity is becoming cheaper.”

What has been generally accepted by the industry is today’s hype will be tomorrow’s normality, today’s things will be tomorrow’s insight, today’s technology will be tomorrow’s solutions, today’s definition of scale will be dwarfed by what is possible tomorrow and what we consider cost reduction today will be considered the growth drivers of tomorrow. Cloud is still considered by some as a means to reduce CAPEX and OPEX, but for forward looking organizations it’s a mean to drive innovation and a competitive edge. AWS plan to be the facilitator.

One concern of the growth of IoT is security, which was met head on by Massingham in his talk. The company are currently driving the adoption of a centralized rules engine which will dictate the flow of information around the network. The function, which seemingly incorporates aspects of machine learning technologies, is capable of reading the content of a message being sent, evaluating the sensitivity of the message and then making routing decisions based on what it has learnt.

The IoT market may be a crowded place for the moment, though building security principles into the core of an offering could offer AWS a differentiator. In the next couple of weeks Amazon will release its Q2 results, indicating how close it will get to breaking the $10 billion barrier. While this is a healthy accomplishment for an organization celebrating its 10th birthday, IoT could be the answer for the team to breach the second $10 billion.