AWS, Microsoft Azure, Google Cloud battle about to get chippy
Hyperscalers are getting chippy as they compete for generative AI workloads. It's not that cloud providers were ever exactly collegial, but as growth hits the law of large numbers, enterprises optimize cloud spending and generative AI threatens market share standings you can expect sniping between the big vendors.
This chippy reality was made clear during AWS CEO Adam Selipsky's keynote at re:Invent. He made a handful of not-so-veiled references to Microsoft Azure, its ties to OpenAI and its recent foray into custom silicon.
When Selipsky talked about Graviton4, he noted that "other cloud providers have not delivered on their first server processors." With new versions of Trainium and Inferentia processors he said something similar. The snark revved up when Selipsky was talking about model choices and Amazon Bedrock.
"You don’t want a cloud provider that’s beholden primarily to one model provider, you need a real choice. The events of the past 10 days have made that very clear,” said Selipsky.
When talking security, Selipsky cruised by a headline about Microsoft and OpenAI.
Clearly, the OpenAI fiasco made it clear that you may not want to hitch your generative AI wagon to one model. Microsoft's investment in OpenAI gave the company a head start in generative AI and copilots, but that innovation bet almost backfired when OpenAI CEO Sam Altman was booted, hired by Microsoft and then reinstated at OpenAI. You'd be a fool if you were an OpenAI customer and not thinking about diversification.
However, it's also worth noting that Azure has its own plans for model choice and models as a service. Microsoft CEO Satya Nadella has gone out of his way to say that the company's AI plans go beyond OpenAI and there are multiple models available.
For AWS, which has been the cloud leader from the launch of the industry, the competition from Azure must feel odd. Perhaps Selipsky's swipes work out over time. In my experience talking trash can work, but often doesn't. In technology, the only executive I've seen really pull off the chippy vibe is Oracle CTO Larry Ellison. You can argue that Ellison's version of the truth is sometimes stretched, but he has a knack for punching competitors in the head.
Frankly, I'm a bit surprised that Oracle didn't rent out the Sphere during re:Invent. Or maybe Google Cloud just beat Oracle to it.
Where is all this headed? You already know. It's a return to the fear, uncertainty and doubt age. Here are a few techniques you can use to navigate the new sniping between cloud providers:
Generative AI has the potential to rewrite the cloud standings and hyperscalers are going to scrap it out accordingly. For the record, here's a look at the hyperscaler growth rates in their most recent quarters:
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Here's the week from the Constellation Research team at re:Invent.
Return to work and real estate
Real estate has become national, and the data flow has been fascinating to watch. US citizens migrated to new states during the pandemic as remote work took off. Now enterprises want employees back in the office and in hub locations.
Redfin found that 10% of people selling homes are moving because they're called back to the office. In addition, migration trends have bounced around a good bit in recent months. The migration away from large metros is continuing but at a slower rate.
In real estate market guesstimates for 2024--like this one from Realtor.com--mortgage rates, inventory and buying capacity are key themes. My hunch is that return to office programs may also become a big theme.
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