First things first

Let's start where we left off yesterday, which are the reports that Amazon Web Services is developing its own network switches to sell to enterprise buyers. The move has been presented in some places as an assault on Cisco, but that's not the case at all. Rather, as Ben Thompson of Stratechery explains (subscription required here, sorry), Microsoft is likely AWS's main concern.

I hope I made that clear in my newsletter yesterday (and that Google could do something here, as well), although I intentionally didn't mention the Microsoft Azure Stack. Mostly, that's because I think we're talking about two very different approaches to how a hybrid cloud strategy might work. The Stratechery post summarizes the difference thusly:

Microsoft is offering to create a unified environment — defined by Microsoft — between the cloud and on-premises server, the idea being that up-front work will result in more efficient development. Amazon, on the other hand, is focusing on infrastructure and leaving the implementation details up to customers.

The presumed lightweight AWS approach is probably the right one for this moment in time, for reasons ranging from the commoditization of data center hardware to the DevOps changes brought about by containers and container orchestration. While Azure Stack was a good idea, Microsoft has been talking about a local Azure appliance since 2010 -- long before Kubernetes was a twinkle in Google's eye; when private cloud meant OpenStack; and, most notably, back when Om Malik was still writing about enterprise IT ;-) Customers don't necessarily need a replica of a public cloud in their own data center; they just need a better way to move workloads and data between the two environments.

If AWS really does start selling data center switches (again, this is all speculation), it wouldn't surprise me to see Microsoft and Google follow suit with something similar. The big question then, aside from whether customers would buy it, is how these cloud providers would work with existing data center software vendors (one of which I work for). Would cloud providers be happy owning the infrastructure layer, or would they make a play for the whole stack?

But back to the cloud ...

... where AWS and Microsoft are actually competing tooth and nail today. The news that received the most attention was Microsoft's deal with Walmart, a fierce Amazon rival and longtime private cloud advocate (if only as a strategy to avoid paying AWS). Here are a couple stories on that:

Not to be outdone, AWS answered with three customer announcements of its own. These are all AWS press releases:

AWS also announced a bunch of product updates, which you can find here. I think the most compelling are its new, high-performance instance types, which are made possible by the AWS Nitro system. AWS blogger extraordinaire Jeff Barr explained that like this last month:

The Nitro system is a rich collection of building blocks that can be assembled in many different ways, giving us the flexibility to design and rapidly deliver EC2 instance types with an ever-broadening selection of compute, storage, memory, and networking options. We will deliver new instance types more quickly than ever in the months to come, with the goal of helping you to build, migrate, and run even more types of workloads.

The more customizable cloud providers can make their instances, the more reasons they give customers to run workloads there, and the less power they give to smaller cloud providers that tend to operate in the niches.

AWS also announced another avenue through which it can enable some degree of hybrid cloud, even without selling traditional gear: new instance types that can run on its Snowball Edge storage appliance. The device was released as a way for companies to ship data to AWS for faster loading into cloud storage, but they can now be configured to run computing tasks during their time in the factory (or wherever), as well.

This is on top of the work AWS and Microsoft are already doing around getting connected IoT devices to run their software (I wrote about AWS Greengrass and Azure IoT Edge back in June 2017). We tend to think about hybrid cloud and on-premises computing involving servers and switches, but the advent of true edge computing is also opening up new fields of competition. And there's a lot at stake for the cloud providers or software vendors that can own computing on these new classes of devices, wherever they are.

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