AWS CEO urges enterprises to do more in the cloud in the face of economic uncertainty

Amazon Web Services (AWS) CEO Adam Selipsky is imploring cash-strapped enterprises to move more of their IT to the cloud if they want to cut costs.

During the opening keynote of this year’s AWS Re:Invent partner and customer conference in Las Vegas, Selipsky cited a series of examples of reference customers who, against a backdrop of economic uncertainty, have made dramatic cost savings by opting to move more of their on-premise IT to the cloud.

“In times of uncertainty, it actually can be tempting to cut back and slow down, but when it comes to cloud, many of our customers know that they should be leaning in precisely because of economic uncertainty,” he said. “The cloud is more cost-effective and many customers are saving 30% or more.”

He cited the examples of US-based heating and ventilation firm Carrier Global, which claims to have seen a 40% reduction in the cost of running its mission-critical enterprise resource planning (ERP) systems in the cloud, and life sciences firm Gilead, which is on course to save $60m over five years through “strategic cloud adoption initiatives”.

“If you’re looking to tighten your belt, the cloud is the place to do it,” said Selipsky – because of the flexibility it offers enterprises when it comes to scaling up or down their operations in the face of fluctuating demand.

He went on to share the story of app-based holiday rental company Airbnb which, because of its earlier foray into the public cloud, was better equipped to weather the downturn in demand for its services during the Covid-19 pandemic.

“Airbnb was already a significant cloud user,” said Selipsky. “And with all their expertise in the cloud, and the efficiencies that they’ve already captured, they were far more prepared than many others when the bottom fell out of the hospitality industry in 2020.

“Airbnb was able to take down their cloud spending by 27% – quickly. And then, when the world began to emerge from the worst of the pandemic, Airbnb was able to quickly turn on the cloud infrastructure that they needed, and continue to drive innovation.”

Selipsky added: “And you still do need to innovate, especially now. You want to develop new ways to operate efficiently and serve customers better. The cloud helps you do this faster, and cost-effectively. You can be agile with fewer resources.”

He also cited a study that claimed moving workloads to the AWS cloud cut the time it takes for its customers to add new features to their products by 43%, with “many customers” achieving 60% savings in the amount of time it takes them to bring new offerings to market.

“What this means is that you want to be ready for anything for operating efficiently, for flexible responses to unexpected circumstances and for innovating,” said Selipsky.

“The cloud gives you this capability, operating efficiently and lead time and being stronger than your competition, ready to accelerate when business conditions change.”

His comments follow the publication of Amazon’s latest set of financial results in late October 2022, which showed the firm’s cloud arm recording its weakest revenue growth rate to date for the three months to 30 September 2022 as enterprises sought to cut their cloud spend because of economic uncertainty.

Rahul Subramanian, creator of cloud cost optimisation software CloudFix and a long-time user of AWS, said he would have liked to have seen and heard more detail during the keynote on the cost-reduction benefits of using cloud given the current economic uncertainty that so many are facing.

“AWS had a large opportunity that they didn’t fully capitalise on,” he said. “I wish Adam had done more to directly address customers’ concerns about the cloud being more expensive. He discussed customers saving anywhere from 40-70%, but with no detail.

“Customers need greater clarity about what they should do. I am sure they will come out with more case studies in the future, but I think that’s what customers need now. In this time of economic uncertainty, data and details to drive those decisions are key.”