Among Amazon’s (AMZN) - Get Amazon.com Inc. Report long list of revenue streams, Amazon Web Services (AWS) is the main profit generator. But the cloud industry may sound a bit “shady” for investors who don't understand the segment and who would rather put their money into business models they have a better understanding of.
Amazon's CTO, Werner Vogels, has published a set of predictions for the technology industry for 2022 and the subsequent years. And it includes plenty of reasons why you should be bullish about the potential of cloud computing.
Here are three of the biggest reasons to be excited about the future of AWS.
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Vogels started by arguing that software development is a creative, but also a very repetitive, task. In order to raise efficiency, artificial intelligence and machine learning algorithms will become “coding assistants” by ultimately doing the “heavy lifting,” such as fixing bugs and reviewing code.
As software engineers become free to focus on the creative part of software development, we can expect productivity gains by:
- An increasing number of software applications being launched every year
- More complex software-products available
- A decrease in companies’ operating expenses, because a smaller number of software engineers per company will be able to produce the same amount of work
New Borders to Cross
According to Vogels, there are multiple fields to be explored by the cloud industry. “The shift we’ll witness in 2022 is the cloud becoming highly specialized at the edges of the network,” he wrote.
Amazon’s CTO explained that software solutions for the “edge” of the internet, such as warehouses, restaurants, and remote locations, are much more specific and “tailored” than the ones we see in the general cloud industry. And in 2022, the industry might be close enough to maturity, so the cloud will be in “our cars, in our tea kettles, and in our TVs.”
All Following ESG Principles
All that improvement will also come hand-in-hand with sustainability. Vogels also argued that software architecture will balance performance delivery and energy consumption, so customers can get the best experience possible while also reducing their carbon footprints.
These tech developments will not only benefit the wealthy population of the planet, but also vulnerable communities, which will be able to access the internet from Project Kuiper’s satellites and a whole new class of applications that will benefit from it.
(Disclaimers: this is not investment advice. The author may be long one or more stocks mentioned in this report. Also, the article may contain affiliate links. These partnerships do not influence editorial content. Thanks for supporting the Amazon Maven)