In its early years, much of Amazon Web Services' (AWS) growth came from the avid embrace of its bread-and-butter cloud computing and storage services by startups and cloud service providers such as Netflix (NFLX) , Instagram, Dropbox, Pinterest and Spotify. Quite often, these companies wanted to be spared the trouble of running their own data centers, and found AWS to be a convenient alternative.
Traditional enterprises that already had their own data centers were also spending money on AWS. But much of it was the result of individual teams and departments taking the initiative to use Amazon (AMZN) for certain workloads or projects, rather than large-scale deals that CIOs were signing off on.
Today, as AWS barrels towards a $15 billion annual revenue run rate, the story looks a lot different. Global 2000-type companies are making "strategic" decisions to move a large chunk of their workloads to AWS, and in some cases shutter many of their data centers along the way. GE and Capital One were among the companies to announce such moves last year.
This transformation has a lot to do with how AWS has evolved from a provider of basic cloud infrastructure (IaaS) services into a platform supporting thousands of apps and value-added managed services that collectively make it easy for enterprises to migrate critical workloads to the cloud and generally replicate much of what they've been doing within their own data centers.
This year's AWS re:invent conference, which runs from Monday to Friday in Las Vegas and is expected to attract thousands of partners, developers and customers, should provide the next chapter in the company's efforts to get big business to stop worrying and love the cloud. Another goal is to keep clients from giving Microsoft (MSFT) and Alphabet's (GOOGL) fast-growing cloud operations a look.