I agree. Although based on the last earnings call where folks were poking at why they’re behind it seems a sensitive spot for AWS leadership. They’re not used to lagging in a hot space, which seems to be driving the panicked disjointed strategy at the moment.
I too would like to see them just admit they’re behind, state it’s not a priority, and focus on what they do well which is the boring (but super important) basic infrastructure stuff.
They don't even have to say they are "behind". I'd like to see them admit that it isn't their focus or why AWS exists, and to leave "GenAI" up to companies that want to pour billions of investor money down the drain as a loss-leader to try to crush the competition.
Nobody in "GenAI" is actually making a profit due to the costs of running it. OpenAI is losing billions of dollars, not even they can see a path to profitability any time soon.
AWS would be wise to steer clear of all of it, for now, as far as I'm concerned. I'd rather they don't raise prices on everything else to try to pay for a GenAI offering that's marginally better or worse than everyone else doing it.
You can almost see the business school case study developing.
“Rather than focusing on core competencies leadership panicked and rushed a poorly guided focus on GenAI without the right leadership and technical talent. Shifting resources towards this price competitive space eroded margins, and took focus away from core areas where AWS was a technical leader. Several years of misguided strategy, poor leadership, and intense fiefdom building during the chaos spelled the beginning of the end of AWS’s once dominant position in cloud. While still a respectful business, AWS is now a low margin commodity player that’s struggling to innovate and is the number 3 cloud provider by revenue.”
I still don't see how having GenAI on the same platform as your database and APIs is somehow the "AWS killer". OpenAI isn't going to suddenly be hosting my APIs and databases. Nobody in GenAI is going to fill the position that AWS holds, except maybe Microsoft Azure, but even then nobody is moving large infrastructure from AWS to Azure just because Microsoft is friends with OpenAI (as of today). And most "cloud" projects don't require "AI", except to be buzz-wordy. "Cloud" and "AI" are two distinctly different businesses with vastly different use cases.
I wonder how much of that is missing Bezos as an arbiter / dictator.
I'm pressed to come up with a scenario where AWS leads cloud AI without something like the infamous "no non-API internal calls" memo/mandate. And Amazon at this point seems to lack a centralized enough leader who can dictate in that way (and have her or his orders followed).
It's less about Bezos and more about the principal/agent problem. There are entire groups within Amazon that exist to justify promotion scope for the manager. Then there are entire groups that are supporting revenue-generating operations but have been reduced to KTLO because there's not scope for promotion.
Promotion-driven development is an issue across MAGMA, but IMO Amazon has it the worst because of the twin drivers of extreme stack-ranking and the focus on equity appreciation in compensation.
Being behind on AI has resulted in a field day for empire builders. Amazon needs to get their overall house in order first before trying to be a leader in AI.
I too would like to see them just admit they’re behind, state it’s not a priority, and focus on what they do well which is the boring (but super important) basic infrastructure stuff.