Tag: AWS

The Big Clouds are All “Hybrid Clouds” Now!

First it was Azure stack, then came AWS/VMWare with AWS Outpost and now there is Google Anthos. Google announced general availability of its Anthos Cloud Services Platform at Google Next this week. Anthos has many elements but the telling one is that it lets you run Google Cloud on-premise and in other cloud environments.

As the number three provider with a new energized leader, you have to wonder if it’s too little, too late? Time will tell. What is interesting is that this move toward hybrid reflects what we are seeing in enterprise use of public clouds – they are all in as long as it’s hybrid. And increasingly multi-cloud.

While each of these offerings from the cloud providers is different, the unifying theme of the Anthos announcement is that the large public clouds are fully embracing the reality of the enterprise hybrid cloud.

So, what exactly does “hybrid cloud” mean? In short, it means that portions of an application or workload can run in your “on premise” data center while other portions run in a public cloud data center. This combination of public and private cloud infrastructure helps optimize the agility, cost, latency, and performance of workloads while minimizing the additional security and manageability requirements. It is especially helpful for existing apps that can move a portion of the overall workload (say storage backup or compute “bursting”) to the cloud. And, it is even better for new or existing applications that want to build or modernize workloads in a cloud native manner.

One way to do this is to have infrastructure on premise that looks and acts like the public cloud’s Infrastructure As A Services (IAAS) offered today by AWS or Azure. AWS Outpost and Microsoft’s Azure Stack are services that help in these use cases. Another approach is when you are trying to move or migrate portions of your application to the public cloud. This is what Google Anthos is all about

Why is Google doing this? First, they hope to compel you to modernize your infrastructure by embracing a lightweight virtualization technology called containers that are predominantly orchestrated/managed by a service called Kubernetes that was originally created at Google. The second reason is that once your application runs in containers it is more portable from one cloud (public or private) to another cloud. In this way, Google hopes to move applications off of AWS and Azure. Here is how the VentureBeat put it:

“It’s one thing to use a service like this for new applications, but many enterprises already have plenty of line-of-business tools that they would like to bring to the cloud as well. For them, Google is launching the first beta of Anthos Migrate today. This service will auto-migrate VMs from on-premises or other clouds into containers in the Google Kubernetes Engine.”

Being in a distant 3rd place position can lead to a counterintuitive strategy. And, Google could benefit from leading the efforts to make workloads portable in the cloud (both to move them from on premise to Google and to move them from AWS/Azure to Google). But, they will have competition in leading the containerization charge from VMWare, Redhat/IBM and in some forms the market leading clouds!

 

re:Invent 2018: What to Expect and What I’ll Be Looking For

Four Trends — The Enterprise’s Time has Finally Arrived

Amazon is hosting their 7th Annual re:Invent conference this week with over 50,000 attendees expected. AWS is approaching $30 billion in annual revenue run rate with a growth rate just shy of 50%. Amazon is the market leader in public cloud services and this year’s re:Invent conference comes at a fascinating time. Enterprise customers are embracing a broad definition of the cloud that is leading to more rapid adoption of both the public cloud and various edge cloud use cases. IBM is buying RedHat for $34 billion, Microsoft has emerged as the clear #2 player in the cloud market and Google is struggling to find their way (as evidenced by Diane Green relinquishing the Google Cloud role to former Oracle executive Thomas Kurian).

The four themes below highlight areas that Amazon will emphasize at re:Invent and provide a roadmap for the world of cloud computing from both a technology and go-to-market perspective in the years ahead. These themes will be highlighted and discussed in the main keynotes, working sessions and conversations throughout the week:

  1. Cloud computing is now the pervasive software model everywhere
  2. Data’s role has been transformed from system of record to system of action and intelligence
  3. Enterprise customers are finally ready to embrace the full potential of cloud models
  4. Partnership alignment is emerging as the key competitive dimension for cloud platforms

Cloud Software Models Are Everywhere

In the past several years terms like public cloud, private cloud, hybrid cloud, edge cloud and more have been used to try and distinguish between types of cloud deployments. But, increasingly any modern application is a cloud application in some form. The core technologies popularized in the public cloud like object stores, event driven functions, and scalable data services are being used everywhere. Those applications may still live “on premise” in a virtualized environment or they may live on a “thing” at the edge connected to massive computing resources at the cloud core. Regardless of where the application was developed or lives, it is based on technologies and processes that were built for the cloud. The pervasive development methodology is agile and iterative. And, the lines have blurred between developers and technology operators for the DevOps that keep these apps running. In that context, “clouds within cloud” and increasingly specialized cloud solutions are emerging for specific customer needs.

My expectation is the emphasis this year at AWS will be on expanding capabilities across several technology categories that make it easier for enterprises to adopt cloud. Compute instance types for CPU’s, GPU’s, FPGA’s and specialized deep learning processors will be expanded. Improved data management, databases and data warehousing capabilities will get launched. AWS’s suite of IoT offerings like Greengrass, CloudFront and FreeRTOS (operating system for microcontrollers) will be enhanced and highlight the growing opportunities for cloud at the edge. And, the capabilities popularized by the public cloud, including containers, event-driven functions, and EC2 instances will increasingly be available “on premise” to enable more hybrid application scenarios.

Data Unlocks Systems of Action and Intelligence

Even more important than “cloud everywhere”, is the transformation of applications through the power of data. Public clouds like AWS are a compelling place for data aggregation, preparation, manipulation, training and automated actions. Once your data systems are enabled in the cloud, you can evolve legacy “systems of record” into “systems of action” that are increasingly automated. From there, your data systems can expand to “systems of intelligence” that increasingly “know” the next best action to take. AWS, Azure, Google Cloud and others understand that if your data is stored and managed in the cloud, the next step is leveraging more advanced data intelligence services offered by your cloud of choice.

I expect that AWS will announce new or improved underlying data services in data streaming, data integration, data management and databases.They will also improve their machine learning application training and deployment capabilities (SageMaker) and their finished ML services (Rekognition, Translate, Comprehend (NLP)). Some of these services are built upon open source platforms and that community has raised concerns about how AWS leverages open source to build their own services. Finally, while subtle, AWS’s data services messaging will focus more on the benefits of AWS versus Azure rather than Oracle.

As it relates to data services, there are two key questions I will be looking to get answered:

  1. How will AWS position new and improved services relative to data services partners like Databricks, MongoDB and Snowflake who offer managed services on AWS today?
  2. Will AWS’s new data service offerings focus more on discrete services or integrated services that focus on holistic customer use cases and needs?

Enterprises Fully Embracing Cloud Models

With most central IT organizations and senior management now embracing the cloud, the products and messaging at re:Invent will be heavily focused on the enterprise “abilities”. These capabilities include securability, scalability, manageability and, increasingly, flexibility. While it is valid to assert that cloud security is better than most on premise data centers, security issues remains a risk to cloud adoption. Security offerings in the cloud and between the cloud and on-premise offerings are becoming more sophisticated. AWS will highlight their new offerings, but so will technology partners like Palo Alto Networks, F5, Tigera, and ExtraHop who can help enterprises secure workloads and enhance security operations on premise and in the cloud.

Central enterprise buyers also care about simplicity, transparency and standardization in the provisioning and management of workloads. I expect AWS to announce some new offerings in these areas as well. To do this, AWS will leverage their substantial investment in the AWS Marketplace which helps customers find, try, buy, deploy, measure and bill different cloud services to become a full-fledged services catalog and automated provisioning offering. AWS will also improve their broader billing and monitoring services to help enterprise customers address the increasingly complex world of Enterprise Discount Plans (EDP’s), Reserved Instances (RI’s) and various cloud migration incentive programs.

Despite not being part of the main keynote this year, VMWare will continue to have a major presence focused around enterprise customers. They have purchased CloudHealth and Heptio and increasingly partnered with companies like Apptio to assist enterprises with their journey to the cloud. Those services could be bundled with VMWare offerings to address the enterprise’s desire to have an independent partner’s perspective on cloud costs, management and innovation.

Partner Alignment Becoming Core Cloud Competition

With cloud deployments everywhere, data transforming applications and enterprise readiness high, the emerging competitive framework for major cloud providers is around how they partner with other technology-driven companies to meet the needs of customers. This is especially true in the enterprise, but the competition between clouds, cloud services and service providers exists across use cases.

AWS is the market leader and that position creates some advantages and challenges for them. On the advantage side, they can buy at sufficient volumes to partner well with infrastructure technology companies. Chip companies like Nvidia and Intel will undoubtedly have new offerings on AWS in the form of modern CPU and GPU service offerings. Contract manufacturers like ZT Systems will benefit from the massive scale and growth of AWS as a behind-the-scenes provider of infrastructure. And, while owned by Microsoft, a service like Github will continue to benefit from AWS’s early and ongoing deep relationship with the cloud developer community who offer ongoing feedback and insights to AWS product teams.

AWS’s relationship with other software providers, systems integrators and modern managed services providers are more complex. Some software companies, like the data services ones referenced earlier, face competing AWS offerings. And, sometimes those AWS offerings are built on open source software shaped by a community that favors “openness”. Established software companies like AppDynamics/Cisco, Splunk, and NewRelic are trying to make it easy for an enterprise to manage workloads whether they are in the public or private cloud. And, larger companies like VMWare and IBM/RedHat will increasingly be emphasizing how their software and services work and can help move workloads across the different cloud providers. Of course, hundreds of smaller, private companies will be attempting to leverage the AWS core infrastructure to deliver new solutions across application areas and vertical solutions with many of them building “intelligent applications” that leverage data, cloud compute and domain knowledge to solve specific customer problems.

In addition, enterprises are still trying to determine which workloads they can “lift and shift” in to the public cloud, which ones they can extend/expand to the cloud, and which ones are just not ready for the cloud (because of their proprietary hardware, high latency requirements or privacy/security concerns). These enterprises are looking for help from AWS directly and from a growing mix of cloud-native and traditional systems integrators. Those systems integrators are shaping the cloud strategies of enterprise customers by delivering more value in professional and modern-day managed services.

These realities lead me to focus on two key questions around cloud partnering:

  1. What role will AWS Marketplace play in aligning AWS with other technology partners and their end user customers?
  2. How do different partners view the quality of alignment they have with AWS relative to Microsoft as well as other cloud providers?

Beyond these four core areas, it will be exciting to see a broad mix of customer use cases at re:Invent. The agility and flexibility of the public cloud have unlocked innovations for private, non-profit and public sector customers of many shapes and sizes. Work done on AWS is helping people collaborate more effectively, improve their customer relationships, bring intelligence to automobiles, and even cure cancers. In the “cloud everywhere” world that exists today, AWS, their customers and their partners are only getting started!

Note: ExtraHop, Tigera and Snowflake are Madrona Venture Group portfolio companies.

The Road to Cloud Nirvana: The Madrona Venture Group’s View on Serverless

S. Somasegar – Managing Director, Madrona Venture Group

The progression over the last 20 years from on-premise servers, to virtualization, to containerization, to microservices, to event-driven functions and now to serverless computing is allowing software development to become more and more abstracted from the underlying hardware and infrastructure. The combination of serverless computing, microservices, event-driven functions and containers truly form a distributed computing environment that enables developers to build and deploy at-scale distributed applications and services. This abstraction between applications and hardware allows companies and developers to focus on their applications and customers—not worrying about scaling, managing, and operating servers or runtimes.

In today’s cloud world, more and more companies are moving towards serverless products like AWS Lambda to run application backends, respond to voice and chatbot requests, and process streaming data because of the benefits of scaling, availability, cost, and most importantly, the ability to innovate faster because developers no longer need to manage servers. We believe that microservices and serverless functions will form the fabric of the intelligent applications of the future. The massive movement towards containers has validated the market demand for hardware abstraction and the ability to “write once, run anywhere,” and serverless computing is the next stage of this evolution.

Madrona’s Serverless Investing Thesis

Dan Li – Principal, Madrona Venture Group

Today, developers can use products like AWS Lambda, S3, and API Gateway in conjunction with services like Algorithmia, to assemble the right data sources, machine learning models, and business logic to quickly build prototypes and production-ready intelligent applications in a matter of hours. As more companies move towards this mode of application development, we expect to see a massive amount of innovation around AI and machine learning, application of AI to vertically-focused applications, and new applications for IOT devices driven by the ability for companies to build products faster than ever.

For all the above-mentioned reasons, Madrona has made several investments in companies building tools for microservices and serverless computing in the last year and we are continuing to look for opportunities in this space as the cloud infrastructure continues to evolve rapidly.Nevertheless, with the move towards containerization and serverless functions, it can be much harder to monitor application performance, debug applications, and ensure that applications have the correct security and policy settings. For example, SPIFFE (Secure Production Identity Framework for Everyone) provides some great context for the kinds of identity and trust-related work that needs to happen for people to be able to build, share, and consume micro-services in a safe and secure manner.

Below, you’ll hear from three of the startups in our portfolio and how they are building tools to enable developers and enterprises to adopt serverless approaches, or leveraging serverless technologies to innovate faster and better serve their customers.

Portfolio Company Use Cases

Algorithmia Logo

Algorithmia empowers every developer and company to deploy, manage, and share their AI/ML model portfolio with ease. Algorithmia began as the solution to co-founders Kenny Daniel and Diego Oppenheimer’s frustrations at how inaccessible AI/ML algorithms were. Kenny was tired of seeing his algorithms stuck in an unused portion of academia and Diego was tired of recreating algorithms he knew already existed for his work at Microsoft.

Kenny and Diego created Algorithmia as an open marketplace for algorithms in 2013 and today it services over 60,000 developers. From the beginning, Algorithmia has relied on serverless microservices, and this has allowed the company to quickly expand its offerings to include hosting AI/ML models and full enterprise AI Layer services.

AI/ML models are optimally deployed as serverless microservices, which allows them to quickly and effectively scale to handle any influx of data and usage. This is also the most cost-efficient method for consumers who only have to pay for the compute time they use. This empowers data scientists to consume and contribute algorithms at will. Every algorithm committed to the Algorithmia Marketplace is named, tagged, cataloged, and searchable by use case, keyword, or title. This has enabled Algorithmia to become an AWS Lambda Code Library Partner.

In addition to the Algorithm Marketplace, Algorithmia uses the serverless AI Layer to power two additional services: Hosting AI/ML Models and Enterprise Services where they work with government agencies, financial institutions, big pharma, and retail. The AI layer is cloud, stack, and language agnostic. It serves as a data connector, pulling data from any cloud or on-premises server. Developers can input their algorithms in any language (Python, Java, Scala, NodeJS, Rust, Ruby, and R), and a universal REST API will be automatically generated. This allows any consumer to call and chain algorithms in any combination of languages. Operating under a Kubernetes-orchestrated Docker system allows Algorithmia’s services to operate with the highest degree of efficiency.

As companies add AI/ML capabilities across their organizations, they have the opportunity to escape the complications that come with a monolithic application and begin to implement a serverless microservice architecture. Algorithmia provides the expertise and infrastructure to help them be successful.

Pulumi Logo

Pulumisaw an opportunity in 2017 to fundamentally reimagine how developers build and manage modern cloud systems, thanks in large part to the rise in serverless computing intersecting with advances in containers and managed cloud infrastructure in production. By using programming languages and tools that developers are already familiar with, rather than obscure DSLs and less capable, home-grown templating solutions, Pulumi’s customers are able to focus on application development and business logic rather than infrastructure.

As an example, one of Pulumi’s Enterprise customers was able to move from a dedicated team of DevOps Engineers to a combined Engineering organization—reducing their cloud infrastructure scripts to 1/100th the size in a language the entire team already knew and empowering their developers – and is now substantially more productive than ever before in building and continuously deploying new capabilities. The resulting system uses the best of what the modern cloud has to offer—dozens of AWS Lambdas for event-driven tasks, replacing a costly and complex queuing system, several containers that can run in either ECS or Kubernetes, and several managed AWS services like Amazon CloudFront, Amazon Elasticsearch Service, and Amazon ElastiCache—and now runs at a fraction of the cost before migrating to Pulumi. They have been able to spin up entirely new environments in minutes where it used to take weeks.

Before the recent culmination of serverless, containers, and hosted cloud infrastructure, such an approach simply would not have been possible. In fact, we at Pulumi believe that the real magic is in these approaches living in harmony with one another. Each has its own strengths: containers are great for complex stateful systems, often taking existing codebases and moving them to the cloud; serverless functions are perfect for ultra-low-cost event- and API-oriented systems; and hosted infrastructure lets you focus on your application-specific requirements, instead of reinventing the wheel by manually hosting something that your cloud provider can do better and cheaper. Arguably, each is “serverless” in its own way because infrastructure and servers fade into the background. This disruptive sea change has enabled Pulumi to build a single platform and management suite that fully realizes this entire spectrum of technologies.

The future is bright for serverless- and container-oriented cloud architectures, and Pulumi is excited to be right at the center of it helping customers to realize the incredible benefits.

IOpipe co-founders Erica Windisch and Adam Johnson went from virtualizing servers at companies like Docker, to going “all in” on serverless in 2016. Erica and Adam identified serverless as the next revolution in infrastructure, coming roughly 10 years after the launch of AWS EC2. With a shift in computing moving towards a serverless world, there are new challenges that emerge. From dozens of production Lambda user interviews, Erica and Adam identified that one of the major challenges in adopting serverless was a lack of visibility and instrumentation. In 2016, Erica and Adam co-founded IOpipe to focus on helping companies build, ship, and run serverless applications, faster.

IOpipe is an application operations platform built for serverless architectures running AWS Lambda. Through the collection of high fidelity telemetry within Lambda invocations, users can quickly correlate important data points to discover anomalies and identify issues. IOpipe is a cloud-based SaaS offering that offers tracing, profiling, metrics, logs, alerting, and debugging tools to power up operations and development teams.

IOpipe enables developers to debug code faster by providing real-time visibility into their functions as they develop them. Developers can dig deep into what’s really happening under the hood with tools such as profiling and tracing. Once they’re in production, IOpipe then provides a rich set of observability tools to help bubble up issues before they affect end-users. IOpipe saw customers who previously spent days debugging tough issues in production now able to find the root cause in minutes using IOpipe.

Since launching the IOpipe service in Q3 of 2017, the company has seen customers ranging from SaaS startups to large enterprises enabling their developers to build and ship Lambda functions into production at an incredibly rapid pace. What previously took one customer 18 months can now be done in just two months.

IOpipe works closely with AWS as an advanced tier partner, enabling AWS customers to embrace serverless architectures with power-tools such as IOpipe.

Re:Invent: 2017 Preview & Predictions

AWS is another year older, bigger and more diverse and so will be the 6th Annual Re:Invent conference. Over 40,000 attendees are expected to attend the event reflecting the success of AWS and the cloud movement that the company kick-started. If AWS was a standalone company, it would be recognized as the software company that hit a $20 billion annual revenue run rate in the shortest amount of time. From a branding perspective, AWS appears focused on courting “builders” including business leaders, product managers and developers who want to create, or recreate in the cloud, solutions that solve real world problems. From a thematic perspective, I anticipate five broad areas to be highlighted:

  1. Modern services for modern cloud apps
  2. ML/AI everywhere!
  3. Hybrid workloads go mainstream
  4. Enterprise agility exceeds cost savings
  5. Customer focus balanced with competitive realities

Modern Services and ML/AI

The first two themes – Modern services and ML/AI are targeted at the grass roots builders and innovators who have long been associated with AWS. Modern services include containerized or “serverless” workloads that work individually or in conjunction with other microservices and event-driven functions like AWS Lambda functions. These technologies deliver greater flexibility, interoperability and cost effectiveness for many applications. And, they can be used to either build new applications or help modernize traditional applications. I have spoken to several smaller businesses and small teams at larger companies who are leveraging these capabilities to build more responsive and cost-effective applications.

Credit to @awsgeek, Jerry Hargrove

At Re:Invent we expect to see AWS embracing community standard like Kubernetes for orchestrating modern containers like Docker. Above is a visual highlighting AWS Elastic Container Service and the use of related services on AWS. AWS will also highlight innovative approaches in the cloud and at the edge that build on Lambda functions to ingest data and automatically produce a functional output. I wouldn’t be surprised to see a “developer pipeline” for building, testing and developing these types of event-driven applications.

ML/AI will likely be broadly highlighted in both Andy Jassy’s Day One keynote and the second keynote on Thursday. This category is where the most disruptive innovation is taking place and the fiercest platform competition is occurring. AWS will feature enhancements or new offerings at four levels.

At a platform level, they are expected to highlight Ironman as a unifying layer to help developers ingest and organize data and then design, test and run intelligent (ML/AI powered) applications. This platform leverages MXNet, which is a machine and deep learning framework originally built at the University of Washington, which has properties similar to Google’s Tensorflow framework. Ironman will leverage a new developer tool framework called Gluon that AWS and Microsoft recently launched.

At a core services level, AWS will continue to enhance AWS ML services and infrastructure processing services like GPU’s and FPGA’s that support the data scientists who can build and train their own data models.

For teams that need more finished ML/AI services, AWS will highlight improved versions of ReKognition, Lex and Polly. I also expect new finished services that leverage pre-trained data models the existing offerings to be announced.

The fourth area of ML/AI will be in the context of leveraging other services either built by AWS or AWS partners that deliver solutions to customers. AWS will likely focus on a combination of running cloud services (AWS, Non-AWS) as well as simplifying ML/AI at the edge. For example, third parties are increasingly building security services like Extrahop’s Addy or Palo Alto Network’s cloud firewall and SAAS security services on AWS. Other services using data stored or processed in AWS, often in data warehouses like Snowflake or Redshift, are rapidly growing for vertical markets and for specific use cases like customer personalization, fraud detection or health recommendations. Seeing what AWS and partners announce in ML/AI powered services across the platform, core services, finished services and solutions layers is likely to be the most exciting area of news at Re:Invent this year.

Matt McIlwain-Madrona Venture Group

“Seeing what AWS and partners announce in ML/AI powered services across the platform, core services, finished services and solutions layers is likely to be the most exciting area of news at Re:Invent this year.”

Hybrid Workloads and Enterprise Agility Solutions

While there are pockets of enterprise innovation in ML/AI and “serverless”, the biggest areas of enterprise focus are going to be hybrid applications and enterprise solutions. These areas also highlight some intriguing partnerships between AWS and other technology companies like VMWare, Microsoft and Qumulo.

Last year AWS on VMWare announced a major partnership where AWS created a dedicated, “bare metal” region for VMWare hypervisors, management tools and more running on AWS. This offering has been in beta all year and appears to be gaining strong enterprise traction. It simplifies moving VMWare-based workloads to AWS and enables hybrid workloads when a portion is on AWS and another portion remains on-premise. Customer examples and new capabilities will likely be announced for this partnership. We don’t expect major announcements around bare metal offerings outside VMWare, but enterprise customers are asking for them to be launched in 2018.

While AWS and Microsoft compete for cloud customers on many levels, there has also been a spirit of partnership between the two companies driven by both enterprise customer demand and competitive realities. Microsoft Windows operating system and applications (SQL Server, ActiveSync Directory, Sharepoint and more) are common applications on AWS in addition to their substantial on-premise installed base. AWS is increasingly enabling their defacto cloud standards like S3 object store and EC2 compute instances to run on-premise. AWS has a service called CodeDeploy that enables EC2 instances to run on-premise or for hybrid workloads (https://aws.amazon.com/enterprise/hybrid/). This enables AWS standard services to work with other Microsoft products on-premise. These examples highlight the growing customer demand for hybrid workloads and services across public cloud and on-premise. And, combined with services like Gluon and the Amazon/Microsoft Voice Assistant partnership, the two Seattle-based technology giants are finding ways to work productively together (often to counteract Google).

Beyond the technology giants, smaller companies like Qumulo will be highlighting hybrid workload flexibility and use cases. Qumulo offers a universal, scale-out file system that allows enterprise customers to scale across on-premise and cloud infrastructure. Technology sectors such as storage where Qumulo is focused, application management where New Relic, DataDog and AppDynamics run, along with databases and security and networking will all see “hybrid” highlighted at Re:Invent.

Beyond individual services and workloads, enterprises continue to look for solutions that help them embrace the agility and cost-effectiveness of cloud computing while mitigating the technology and compliance risks and skill-gaps they may face. AWS will continue to highlight their own professional services as well as a cloud-native solution providers like 2nd Watch and Cloudreach and established “systems integrators” like Accenture and CapGemini. But, I expect AWS will emphasize the growing role of the AWS Marketplace this year as a place to find, buy, deploy and bill first and third-party services from. Finally, more software services will be delivered on AWS in a “fully managed” mode. These modern “managed software services” like the aforementioned cloud data warehouse, database/datastores or storage services will help enterprises embrace cloud native applications.

Balancing Customer Focus with Competitive Realities

All four above themes are driven by customer needs and real technological innovations. But, there are also embedded competitive realities across these themes. Microsoft’s Azure adoption continues to grow rapidly. They have also successfully moved customers to Office365 pulling key services like Azure Active Directory and mobile device management with them. In addition, Microsoft is leveraging their on- premise advantage with hybrid solutions and Azure Stack. These offerings help enterprises embrace agility while cost effectively managing legacy hardware and software. Microsoft also continues to invest and promote their ML/AI and serverless capabilities.

Google has emphasized their ML/AI strength with both the Tensorflow open source adoption as well as leveraging differentiated data sources to build and offer data models “as-a-service”. These image, translation and text recognition models have the opportunity to be strategically disruptive for years to come. Of course, Google also operates broadly adopted cloud apps like Gmail and Google Docs where AWS does not. And, the defacto standard for serverless container orchestration and management, Kubernetes, was created inside Google.

These competitors, as well as other enterprise software and hardware incumbents like Oracle, VMWare/Dell, IBM and Salesforce.com and emerging Chinese competitors like Alibaba will continue to invest and challenge AWS in the years ahead as the enterprise gets more fully engaged in the cloud. While I am confident that AWS will remain the clear market leader for years to come, even they will need to continually “re:Invent” themselves to meet growing customer needs and competitive realities. I will be looking for clues about AWS’s future strategy and approach to emerging competition this week.

Note: Extrahop, Qumulo, 2nd Watch and Snowflake are portfolio companies for Madrona Venture Group, where Matt McIlwain is a Managing Director.

Snowflake, a Cloud Native Data Warehouse and Our Newest Investment

Today we are announcing our investment in Snowflake. Snowflake is a cloud native data warehouse. Data warehouses have been used for years to store and analyze, not surprisingly, huge amounts of data. Over the past 5-10 years with the explosion of data and the rise of analytics & insights that this data provides, these stores have grown massively and are getting tougher and tougher to scale and manage in a cost-effective way. We are excited to back a company that embraced and leveraged the potential of cloud infrastructure from the start and is rapidly ramping their capabilities to meet the demands of enterprise cloud computing.

This investment is different from Madrona’s core strategy of investing at an early-stage in Pacific NW based companies. The company is later stage and is primarily based in Silicon Valley. But this company fits other Madrona criteria – the huge and growing secular shift to enterprise cloud computing, an A+ team with ties to Seattle and product and customer leadership in the emerging cloud data warehouse market. But even given this, why Snowflake?

Two of the massive computing trends we actively follow for investments are – the movement of enterprise computing and workloads to the cloud and the development of intelligent applications that make use of data through ML/AI and continuous learning. Both of these require and deal with massive amounts of data. For all the progress that we have made on these trends, we are still in the early phases of this tectonic computing shift – especially for enterprise customers. Many of the previous attempts to make enterprise applications available in the cloud have simply been a reworking of legacy applications, as opposed to cloud native design. We are seeing more technologies that are being designed and built ground-up to be cloud native. That’s exactly what Snowflake did for the world of data warehousing.

Benoit Dageville (co-Founder and CTO) and Thierry Cruanes (co-Founder and architect) came with a rich set of database experiences from Oracle, and they were joined by Bob Muglia as CEO in 2014. Bob is a very accomplished enterprise software and business leader, having spent more than 20 years at Microsoft including running Microsoft’s $16B Server and Tools business. Under Bob’s leadership, Microsoft grew several different multi-billion dollar businesses. Soma has had the opportunity to work for and with Bob over the years at Microsoft and everyone at Madrona sees Bob as a world-class leader. All this experience, expertise and background make Bob the ideal leader for Snowflake. We are really excited about this team and think they are the ones to create a meaningful new business in this industry.

Snowflake is a data warehouse designed and architected for the cloud. It is the first data warehouse built specifically to run in the cloud, and offers a range of performance, concurrency, scale and infrastructure management benefits which legacy, on-premises and cloud data platforms were not designed for. This allows Snowflake to achieve better database performance, respond to higher volumes of concurrent queries without performance degradation, and provide a simpler ongoing SaaS model without infrastructure maintenance – all with an outstanding price/performance characteristic.

Despite only being about 4 years into development, a recent GigaOm analyst report (http://info.snowflake.net/rs/252-RFO-227/images/GigaOm-sector-roadmap-cloud-analytic-databases-2017.pdf) ranked Snowflake as the top cloud analytics database ahead of Google BigQuery, Teradata, Azure Data Warehouse and AWS Redshift. While these other solutions can be a good fit in certain situations, we see Snowflake as a long-term leader in this massive market with its cloud-first technology and cross cloud platform potential.

Source: GigaOm

Snowflake is building a team in Bellevue given the cloud and big data talent that is available in this region. The combination of a world-class proven team, the focus on a cloud-native solution and the potential to be a leader in a massive cloud data warehousing and analytics market are the main reasons we decided to invest and participate in the Snowflake journey. Snowflake is built on Amazon Web Services (AWS) and there is a good partnership and collaboration between Snowflake and AWS. We look forward to being a valuable resource on that partnership given our long history working with AWS. In addition, we are excited to partner with Bob and team and help them build Snowflake’s presence here in the region and around the world.

AWS re:Invent – the Big Announcements and Implications

The momentum continues to build and scale in leaps and bounds. That’s the overwhelming observation and feeling at the end of the 5th annual conference that Amazon hosted in Las Vegas last week for AWS (Amazon Web Services).

Here are some of the key take-aways that we think will have the highest industy impact.

Event-driven Functions and Serverless Computing

Serverless has definitely arrived. As expected, there were a number of new capabilities announced around Lambda, including C# language support, AWS Lambda@Edge to create a “CDN for Compute” and AWS Step Functions to coordinate the components of distributed applications using visual workflows through state machines. Beyond this, it was clear that Lambda, and the serverless approach overall, is being broadly woven into the fabric of AWS services.

In the world of event-driven functions, thinking about a standard way for people to publish events that make it easy to consume those events is going to be critical. Whichever platform gets there first will likely see a tremendous amount of traction.

Innovation in Machine and Deep Learning

AWS has had a machine learning service for a while now, and it was interesting to see a whole slew of new machine learning, deep learning and AI suite of services including Amazon Image Rekognition, Amazon Polly (Text to Speech deep learning service) and Amazon Lex (Natural Language Understanding engine inside Alexa that is now available as a service).

While the concrete use cases are still relatively spare, we – like Amazon – believe this functionality will be integrated into the functionality of virtually all applications in the future.

It is also clear that the proprietary data used to train models are what create differentiated and unique intelligent apps. The distinction between commodity and proprietary data is going to be critical as algorithms become more of a commodity.

Enterprise Credibility

In past years, whether it was intended or unintended, the perception was that taking a bet on AWS meant taking a bet on the public cloud. In other words, there was an unintended consequence of AWS as “all in on public cloud or nothing”. With the VMWare partnership, which was announced a couple months ago, but solidified on stage with VMWare’s CEO, Amazon clearly is supporting the hybrid infrastructure that many enterprises will be dealing with for years to come.

Equally noteworthy was the appearance of Aneel Bhusri, CEO of Workday, on stage to announce that Workday was moving to AWS as their primary cloud for production workloads. Clearly no longer just the realm of primarily dev and test, this is perhaps the strongest statement yet that the public cloud – and AWS in particular – is enterprise production capable.

Moving Up a Layer From a Set of Discrete Services to Solution-based Services

One big theme that showed through this year at AWS was the movement from a set of discrete services to complete solutions both for developers and for operators of applications and services. The beauty of this all is that AWS continues to move forward on this path in a way that is highly empowering for developers and operators.

This approach really shone through during Werner Vogels keynote on Day 2. He laid out AWS’ approach for the “modern data architecture” and then announced how the new service AWS Glue (fully managed data catalog and ETL service) covers all the missing pieces in terms of their end-to-end solution for a modern data architecture on AWS.

Eat the Ecosystem

One of the implications of AWS’ continued growth towards complete solutions is that they continue to eat into the domain of their partner ecosystem. This has been an implied theme in years past, but the pace is accelerating.

Some of the examples that drew the biggest notice:

• AWS X-Ray (analyze and debug distributed applications in production) which aims directly at current monitoring companies like New Relic, AppDynamics and Datadog
• AWS Lightsail (virtual private servers made easy) that, at $5/month, will put significant pressure on companies like Digital Ocean and Linode
• Rekognition (image recognition, part of AI suite described above) that provides a service very similar to Clarifai, who had actually been on a slide just a few prior to the service announcement!

No one should be surprised that AWS’ accelerating expansion will step on the toes of partners. An implication, as @benkepes tweeted, is that the best way to partner and extend AWS is to go very deep for a given use case because AWS will eventually provide the most common horizontal scenarios.

Partner Success = AWS Success

Although some of the new services conflicted with partner offerings, the other side of the coin was that AWS continues to embrace partners and is vested in partners’ success. They clearly understand that having their partners be successful ultimately contributes to more success for AWS. Having customers like Salesforce, WorkDay and Twilio take a complete bet on AWS , making the product of a partner like Chef be available as a fully-managed service on AWS, having a partner like Netflix excited to switch off their last datacenter as they are completely on AWS, and having a company like VMWare embrace AWS as their public cloud partner are some of the great examples of how Amazon is systematically working to ensure that their partners remain successful on AWS, all of which accrues more value and consumption of AWS.

Summary

The cloud opportunity is gigantic and there is room for multiple large players to have a meaningful position strength. However, as of today, Amazon is not just the clear leader but continues to stride forward in an amazing way.

First Published by Geekwire.