This post first appeared in the Constellation Insight newsletter, which features bespoke content weekly.
AWS dutifully rolled out a bevy of generative AI tools and model choices for developers. As usual, the AWS cadence is quick. But the bigger question is whether AWS is speaking to the right crowd when it comes to generative AI. The cloud land grab was bottoms up starting with developers. Generative AI is a boardroom issue and Microsoft and Google Cloud appear to have the better CXO narrative relative to AWS.
At AWS' New York Summit, Swami Sivasubramanian, VP of Databases, Analytics, and ML at AWS, outlined a bevy of generative AI updates to Amazon Bedrock, introduced new models and instances and talked vector data stores. "Generative AI has captured our imagination. I believe it'll transform every industry and business," said Sivasubramanian.
From there, AWS launched multiple models for Amazon Bedrock and other generative AI services. The theme: AWS has the infrastructure and the developer base. Give that base the tools and be the generative AI enabler. This approach is straight from the AWS playbook that has worked so well for years.
What's changed? The decision-makers. Microsoft and Google are simply talking a better generative AI game right now and appear to be capturing mindshare as well as workloads. You can debate whether Microsoft picked a fight with Google that it can't win, but what's more interesting is how AWS isn't mentioned much.
To hear Microsoft CEO Satya Nadella tell it, Azure and Microsoft Cloud are in the generative AI pole position. During Microsoft's fourth-quarter earnings conference call, Nadella said:
"We have grown Azure over the years coming from behind. And here we are as a strong #2 in the lead when it comes to these new workloads. So, for example, we are seeing new logos, customers who may have used out of the cloud for most of what they do, or for the first time, sort of starting to use Azure for some of their new AI workloads.
"We are seeing new customers starting to use Azure for some of their new AI workloads. We also have customers who have used multiple clouds start new data and AI projects."
Nadella talks about CoPilot, intelligent data platforms and all the things CXOs talk about: Productivity, efficiency and process. Toss in a few big-name customers like Chevron and boardrooms listen. It doesn't hurt that enterprises are often Microsoft shops.
Google Cloud is playing a different game, but CEO Sundar Pichai is well-versed in AI and sprinkling generative AI throughout its portfolio. Pichai talks about infrastructure but also returns. Google Cloud also courts developers but is using generative AI to upsell its base of customers.
Pichai said:
"We are making it easier for others to innovate using AI. One way is by providing Google Cloud's high-performance infrastructure, optimized for a range of generative AI models. It's being used by thousands of customers and partners to transform their businesses."
Google Cloud, which is playing from behind at No. 3, is betting generative AI will boost its addressable market. Pichai continued:
"Our new generative AI offerings are expanding our total addressable market and winning new customers. We are seeing strong demand for more than 80 models, including third-party and popular open source in our Vertex, Search and Conversational AI platforms with a number of customers growing more than 15x from April to June. Our generative AI capabilities also give us an opportunity to win new customers and upsell into our installed base of 9 million paying Google Workspace customers."
Pichai said Google Cloud is "engaging in more conversations" with enterprise executives.
Even the AWS-obsessed Oracle CTO Larry Ellison is in on the act when it comes to AI workloads.
What's unclear is whether generative AI ultimately means AWS loses a material amount of market share. AWS is the clear cloud leader, but now the company looks like it needs a storyline that appeals to CXOs as much as developers. Stay tuned for AWS' second quarter results Aug. 3.
