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AWS Case Studies: Services and Benefits in 2024

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With its extensive range of cloud services, Amazon Web Services (AWS) has completely changed the way businesses run. Organisations demonstrate how AWS has revolutionized their operations by enabling scalability, cost-efficiency, and innovation through many case studies. AWS's computing power, storage, database management, and artificial intelligence technologies have benefited businesses of all sizes, from startups to multinational corporations. These include improved security, agility, worldwide reach, and lower infrastructure costs. With Amazon AWS educate program it helps businesses in various industries to increase growth, enhance workflow, and maintain their competitiveness in today's ever-changing digital landscape. So, let's discuss the AWS cloud migration case study   and its importance in getting a better understanding of the topic in detail.

What are AWS Case Studies, and Why are They Important?

The   AWS case   studies comprehensively explain how companies or organizations have used Amazon Web Services (AWS) to solve problems, boost productivity, and accomplish objectives. These studies provide real-life scenarios of Amazon Web Services (AWS) in operation, showcasing the wide range of sectors and use cases in which AWS can be successfully implemented. They offer vital lessons and inspiration for anyone considering or already using AWS by providing insights into the tactics, solutions, and best practices businesses use the AWS Cloud Engineer program . The Amazon ec2 case study   is crucial since it provides S's capabilities, assisting prospective clients in comprehending the valuable advantages and showcasing AWS's dependability, scalability, and affordability in fostering corporate innovation and expansion.

What are the Services Provided by AWS, and What are its Use Cases?

The   case study on AWS in Cloud Computing provided and its use cases mentioned:

Elastic Compute Cloud (EC2) Use Cases

Amazon Elastic Compute Cloud (EC2) enables you to quickly spin up virtual computers with no initial expenditure and no need for a significant hardware investment. Use the AWS admin console or automation scripts to provision new servers for testing and production environments promptly and shut them down when not in use.

AWS EC2 use cases consist of:

• With options for load balancing and auto-scaling, create a fault-tolerant architecture.
• Select EC2 accelerated computing instances if you require a lot of processing power and GPU capability for deep learning and machine learning.

Relational Database Service (RDS) Use Cases

Since Amazon Relational Database Service (Amazon RDS) is a managed database service, it alleviates the stress associated with maintaining, administering, and other database-related responsibilities.

AWS RDS uses common cases, including:

• Without additional overhead or staff expenditures, a new database server can be deployed in minutes and significantly elevate dependability and uptime. It is the perfect fit for complex daily database requirements that are OLTP/transactional.
• RDS should be utilized with NoSQL databases like Amazon OpenSearch Service (for text and unstructured data) and DynamoDB (for low-latency/high-traffic use cases).

AWS Workspaces

AWS offers Amazon Workspaces, a fully managed, persistent desktop virtualization service, to help remote workers and give businesses access to virtual desktops within the cloud. With it, users can access the data, apps, and resources they require from any supported device, anywhere, at any time.

AWS workspaces use cases

• IT can set up and manage access fast. With the web filter, you can allow outgoing traffic from a Workspace to reach your chosen internal sites.
• Some companies can work without physical offices and rely solely on SaaS apps. Thus, there is no on-premises infrastructure. They use cloud-based desktops via AWS Workspaces and other services in these situations.

AWS Case Studies

Now, we'll be discussing different case studies of AWS, which are mentioned below: -

Case Study - 1: Modern Web Application Platform with AWS

American Public Media, the programming section of Minnesota Public Radio, is one of the world's biggest producers and distributors of public television. To host their podcast, streaming music, and news websites on AWS, they worked to develop a proof of concept.

After reviewing an outdated active-passive disaster recovery plan, MPR decided to upgrade to a cloud infrastructure to modernize its apps and methodology. This infrastructure would need to be adaptable to changes within the technology powering their apps, scalable to accommodate their audience growth, and resilient to support their disaster recovery strategy.

MPR and AWS determined that MPR News and the public podcast websites should be hosted on the new infrastructure to show off AWS as a feasible choice. Furthermore, AWS must host multiple administrative apps to demonstrate its private cloud capabilities. These applications would be an image manager, a schedule editor, and a configuration manager.

To do this, AWS helped MPR set up an EKS Kubernetes cluster . The apps would be able to grow automatically according to workload and traffic due to the cluster. AWS and MPR developed Elasticsearch at Elastic.co and a MySQL instance in RDS to hold application data.

Business Benefits

Considerable cost savings were made possible by the upgraded infrastructure. Fewer servers would need to be acquired for these vital applications due to the decrease in hardware requirements. Additionally, switching to AWS made switching from Akamai CDN to CloudFront simple. This action reduced MPR's yearly expenses by thousands.

Case Study - 2: Platform Modernisation to Deploy to AWS

Foodsby was able to proceed with its expansion goals after receiving a $6 million investment in 2017, but it still needed to modernize its mobile and web applications. For a faster time to launch to AWS, they improved and enhanced their web, iOS, and Android applications.

Sunsetting technology put this project on a surged timeline. Selecting the mobile application platform required serious analysis and expert advice to establish consensus across internal stakeholders.

Improving the creation of front-end and back-end web apps that separated them into microservices to enable AWS hosting, maximizing scalability. Strengthening recommended full Native for iOS and Android and quickly creating and implementing that solution.

Case Study - 3: Cloud Platform with Kubernetes

SPS Commerce hired AWS to assist them with developing a more secure cloud platform, expanding their cloud deployment choices through Kubernetes, and educating their engineers on these advanced technologies.

SPS serves over 90,000 retail, distribution, grocery, and e-commerce businesses. However, to maintain its growth, SPS needs to remove obstacles to deploying new applications on AWS and other cloud providers in the future. They wanted a partner to teach their internal development team DevOps principles and reveal them to Kubernetes best practices, even though they knew Kubernetes would help them achieve this.

To speed up new project cycle times, decrease ramp-up times, and improve the team's Kubernetes proficiency, it assisted with developing a multi-team, Kubernetes-based platform with a uniform development method. The standards for development and deployment and assisted them in establishing the deployment pipeline.

Most teams can plug, play, and get code up and running quickly due to the streamlined deployment interface. SPS Commerce benefits from Kubernetes' flexibility and can avoid vendor lock-in, which they require to switch cloud providers.

Case Study - 4: Using Unified Payment Solutions to Simplify Government Services

The customer, who had a portfolio of firms within its authority, needed to improve experience to overcome the difficulty of combining many payment methods into a single, unified solution.

Due to the customers' varied acquisitions, the payment system landscape became fragmented, making it more difficult for clients to make payments throughout a range of platforms as well as technologies. Providing a streamlined payment experience could have been improved by this lack of coherence and standardization.

It started developing a single, cloud-based payment system that complies with the customers' microservices-based reference design. CRUD services were created after the user interface for client administration was set at the beginning of the project.

With this, the customer can streamline operations and increase efficiency by providing a smooth payment experience.

The new system demonstrated a tremendous improvement over the old capability, demonstrating the ability to handle thousands of transactions per second.

Maintaining system consistency and facilitating scalability and maintenance were made more accessible by aligning with the reference architecture.

Case Study - 5: Accelerated Data Migration to AWS

They selected improvements to create   an   AWS cloud migration case study cloud platform to safely transfer their data from a managed service provider to AWS during the early phases of a worldwide pandemic.

Early in 2020, COVID-19 was discovered, and telemedicine services were used to lessen the strain on hospital infrastructure. The number of telehealth web queries increased dramatically overnight, from 5,000 to 40,000 per minute. Through improvement, Zipnosis was able to change direction and reduce the duration of its AWS migration plan from six to three months. The AWS architecture case study includes HIPAA, SOC2, and HITRUST certification requirements. They also wanted to move their historic database smoothly across several web-facing applications while adhering to service level agreements (SLAs), which limited downtime.

Using Terraform and Elastic Kubernetes Service, the AWS platform creates a modern, infrastructure-as-code, HIPAA-compliant, and HITRUST-certified environment. With the help of serverless components, tools were developed to roll out an Application Envelope, enabling the creation of a HIPAA-compliant environment that could be activated quickly.

Currently, Zipnosis has internal platform management. Now that there is more flexibility, scaling up and down is more affordable and accessible. Their services are more marketable to potential clients because of their scalable, secure, and efficient infrastructure. Their use of modern technologies, such as Kubernetes on Amazon EKS, simplifies hiring top people. Zipnosis is in an excellent position to move forward.

Case Study - 6: Transforming Healthcare Staffing

The customer's outdated application presented difficulties. It was based on the outdated DBROCKET platform and needed an intuitive user interface, testing tools, and extensibility. Modernizing the application was improving the job and giving the customer an improved, scalable, and maintainable solution.

Although the customer's old application was crucial for predicting hospital staffing needs, maintenance, and improvements were challenging due to its reliance on the obscure DBROCKET platform. Hospitals lost money on inefficient staff scheduling due to the application's lack of responsiveness and a mobile-friendly interface.

Choosing Spring Boot and Groovy for back-end development to offer better maintainability and extensibility throughout the improved migration of the application from DBROCKET to a new technology stack. Unit tests were used to increase the reliability and standard of the code.

Efficiency at Catalis increased dramatically when the advanced document redaction technology was put in place. They were able to process papers at a significantly higher rate because the automated procedure cut down the time and effort needed for manual redaction.

Catalis cut infrastructure costs by utilizing serverless architecture and cloud-based services. They saved a significant amount of money because they were no longer required to upgrade and maintain on-premises servers.

The top-notch Knowledgehut best Cloud Computing courses that meet different demands and skill levels are available at KnowledgeHut. Through comprehensive curriculum, hands-on exercises, and expert-led instruction, attendees may learn about and gain practical experience with cloud platforms, including AWS, Azure, Google Cloud, and more. Professionals who complete these courses will be efficient to succeed in the quickly developing sector of cloud computing.

Finally,   a   case study of   AWS retail case studies offers a range of features and advantages. These studies show how firms in various industries use AWS for innovation and growth, from scalability to cost efficiency. AWS offers a robust infrastructure and a range of technologies to satisfy changing business needs, whether related to improving customer experiences with cloud-based solutions or streamlining processes using AI and machine learning. These case studies provide substantial proof of AWS's influence on digital transformation and the success of organizations.

Frequently Asked Questions (FAQs)

From the case study of Amazon web services, companies can learn how other businesses use AWS services to solve real-world problems, increase productivity, cut expenses, and innovate. For those looking to optimize their cloud strategy and operations, these case studies provide insightful information, optimal methodologies, and purpose. 

You can obtain case studies on AWS through the AWS website, which has a special section with a large selection of case studies from different industries. In addition, AWS releases updated case studies regularly via various marketing platforms and on its blog.

The case study of Amazon web services, which offers specific instances of how AWS services have been successfully applied in various settings, can significantly assist in the decision-making process for IT initiatives. Project planning and strategy can be informed by the insights, best practices, and possible solutions these case studies provide.

Kingson Jebaraj

Kingson Jebaraj is a highly respected technology professional, recognized as both a Microsoft Most Valuable Professional (MVP) and an Alibaba Most Valuable Professional. With a wealth of experience in cloud computing, Kingson has collaborated with renowned companies like Microsoft, Reliance Telco, Novartis, Pacific Controls UAE, Alibaba Cloud, and G42 UAE. He specializes in architecting innovative solutions using emerging technologies, including cloud and edge computing, digital transformation, IoT, and programming languages like C, C++, Python, and NLP. 

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Case studies

Companies have applied serverless architectures to use cases from stock trade validation to e-commerce website construction to natural language processing. AWS serverless portfolio offers the flexibility to create a wide array of applications, including those requiring assurance programs such as PCI or HIPAA compliance.

The following sections illustrate some of the most common use cases but are not a comprehensive list. For a complete list of customer references and use case documentation, see Serverless Computing .

Serverless websites, web Apps, and mobile backends

Serverless approaches are ideal for applications where the load can vary dynamically. Using a serverless approach means no compute costs are incurred when there is no end-user traffic while still offering instant scale to meet high demand, such as a flash sale on an e-commerce site or a social media mention that drives a sudden wave of traffic.

Compared to traditional infrastructure approaches, it is also often significantly less expensive to develop, deliver, and operate a web or mobile backend when architected in a serverless fashion.

AWS provides the services developers need to construct these applications rapidly:

Amazon Simple Storage Service (Amazon S3) and AWS Amplify offer a simple hosting solution for static content.

AWS Lambda, in conjunction with Amazon API Gateway, provides support for dynamic API requests using functions.

Amazon DynamoDB offers a simple storage solution for the session and per-user state.

Amazon Cognito provides an easy way to handle end-user registration, authentication, and access control to resources.

Developers can use AWS Serverless Application Model (SAM ) to describe the various elements of an application.

AWS CodeStar can set up a CI/CD toolchain with just a few clicks.

To learn more, see the whitepaper AWS Serverless Multi-Tier Architectures , which provides a detailed examination of patterns for building serverless web applications. For complete reference architectures, see Serverless Reference Architecture for creating a Web Application and Serverless Reference Architecture for creating a Mobile Backend on GitHub.

Customer example – Neiman Marcus

A luxury household name, Neiman Marcus has a reputation for delivering a first-class, personalized customer service experience. To modernize and enhance that experience, the company wanted to develop Connect, an omnichannel digital selling application that would empower associates to view rich, personalized customer information with the goal of making each customer interaction unforgettable.

Choosing a serverless architecture with mobile development solutions on Amazon Web Services (AWS) enabled the development team to launch the app much faster than in the 4 months it had originally planned. “Using AWS cloud-native and serverless technologies, we increased our speed to market by at least 50 percent and were able to accelerate the launch of Connect,” says Sriram Vaidyanathan, senior director of omni engineering at Neiman Marcus.

This approach also greatly reduced app-building costs and provided developers with more agility for the development and rapid deployment of updates. The app elastically scales to support traffic at any volume for greater cost efficiency, and it has increased associate productivity. For more information, see the Neiman Marcus case study .

IoT backends

The benefits that a serverless architecture brings to web and mobile apps make it easy to construct IoT backends and device-based analytic processing systems that seamlessly scale with the number of devices.

For an example reference architecture, see Serverless Reference Architecture for creating an IoT Backend on GitHub.

Customer example – iRobot

iRobot, which makes robots such as the Roomba cleaning robot, uses AWS Lambda in conjunction with the AWS IoT service to create a serverless backend for its IoT platform. As a popular gift on any holiday, iRobot experiences increased traffic on these days.

While huge traffic spikes could also mean huge headaches for the company and its customers alike, iRobot’s engineering team doesn’t have to worry about managing infrastructure or manually writing code to handle availability and scaling by running on serverless. This enables them to innovate faster and stay focused on customers. Watch the AWS re:Invent 2020 video Building the next generation of residential robots for more information.

Data processing

The largest serverless applications process massive volumes of data, much of it in real-time. Typical serverless data processing architectures use a combination of Amazon Kinesis and AWS Lambda to process streaming data, or they combine Amazon S3 and AWS Lambda to trigger computation in response to object creation or update events.

When workloads require more complex orchestration than a simple trigger, developers can use AWS Step Functions to create stateful or long-running workflows that invoke one or more Lambda functions as they progress. To learn more about serverless data processing architectures, see the following on GitHub:

Serverless Reference Architecture for Real-time Stream Processing

Serverless Reference Architecture for Real-time File Processing

Image Recognition and Processing Backend reference architecture

Customer example – FINRA

The Financial Industry Regulatory Authority (FINRA) used AWS Lambda to build a serverless data processing solution that enables them to perform half a trillion data validations on 37 billion stock market events daily.

In his talk at AWS re:Invent 2016 entitled The State of Serverless Computing (SVR311) , Tim Griesbach, Senior Director at FINRA, said, “We found that Lambda was going to provide us with the best solution for this serverless cloud solution. With Lambda, the system was faster, cheaper, and more scalable. So at the end of the day, we’ve reduced our costs by over 50 percent, and we can track it daily, even hourly.”

Customer example – Toyota Connected

Toyota Connected is a subsidiary of Toyota and a technology company offering connected platforms, big data, mobility services and other automotive-related services.

Toyota Connected chose serverless computing architecture to build its Toyota Mobility Services Platform, leveraging AWS Lambda, Amazon Kinesis Data Streams (Amazon KDS), and Amazon S3 to offer personalized, localized, and predictive data to enhance the driving experience.

With its serverless architecture, Toyota Connected seamlessly scaled to 18 times its usual traffic volume, with 18 billion transactions per month running through the platform, reducing aggregation job times from 15+ hours to 1/40th of the time while reducing operational burden. Additionally, serverless enabled Toyota Connected to deploy the same pipeline in other geographies with smaller volumes and only pay for the resources consumed.

For more information, read our Big Data Blog on Toyota Connected or watch the re:Invent 2020 video Reimagining mobility with Toyota Connected (AUT303) .

AWS Lambda is a perfect match for many high-volume, parallel processing workloads. For an example of a reference architecture using MapReduce, see Reference Architecture for running serverless MapReduce jobs .

Customer example – Fannie Mae

Fannie Mae, a leading source of financing for mortgage lenders, uses AWS Lambda to run an “embarrassingly parallel” workload for its financial modeling. Fannie Mae uses Monte Carlo simulation processes to project future cash flows of mortgages that help manage mortgage risk.

The company found that its existing HPC grids were no longer meeting its growing business needs. So Fannie Mae built its new platform on Lambda, and the system successfully scaled up to 15,000 concurrent function executions during testing. The new system ran one simulation on 20 million mortgages completed in 2 hours, which is three times faster than the old system. Using a serverless architecture, Fannie Mae can run large-scale Monte Carlo simulations effectively because it doesn’t pay for idle compute resources. It can also speed up its computations by running multiple Lambda functions concurrently.

Fannie Mae also experienced shorter than typical time-to-market because they were able to dispense with server management and monitoring, along with the ability to eliminate much of the complex code previously required to manage application scaling and reliability. See the Fannie Mae AWS Summit 2017 presentation SMC303: Real-time Data Processing Using AWS Lambda for more information.

IT automation

Serverless approaches eliminate the overhead of managing servers, making most infrastructure tasks, including provisioning, configuration, management, alarms/monitors, and timed cron jobs, easier to create and manage.

Customer example – Autodesk

Autodesk, which makes 3D design and engineering software, uses AWS Lambda to automate its AWS account creation and management processes across its engineering organization.

Autodesk estimates that it realized cost savings of 98 percent (factoring in estimated savings in labor hours spent provisioning accounts). It can now provision accounts in just 10 minutes instead of the 10 hours it took to provision with the previous, infrastructure-based process.

The serverless solution enables Autodesk to automatically provision accounts, configure and enforce standards, and run audits with increased automation and fewer manual touchpoints. For more information, see the Autodesk AWS Summit 2017 presentation SMC301: The State of Serverless Computing . Visit GitHub to see the Autodesk Tailor service.

Machine learning

You can use serverless services to capture, store, and preprocess data before feeding it to your machine learning model. After training the model, you can also serve the model for prediction at scale for inference without providing or managing any infrastructure.

Customer example – Genworth

Genworth Mortgage Insurance Australia Limited is a leading provider of lenders’ mortgage insurance in Australia. Genworth has more than 50 years of experience and data in this industry and wanted to use this historical information to train predictive analytics for loss mitigation machine learning models.

To achieve this task, Genworth built a serverless machine learning pipeline at scale using services like AWS Glue, a serverless managed ETL processing service to ingest and transform data, and Amazon SageMaker to batch transform jobs and, perform ML inference, and process and publish the results of the analysis.

With the ML models, Genworth could analyze recent repayment patterns for each insurance policy to prioritize them in likelihood and impact for each claim. This process was automated end-to-end to help the business make data-driven decisions and simplify high-value manual work performed by the Loss Mitigation team. Read the Machine Learning blog How Genworth built a serverless ML pipeline on AWS using Amazon SageMaker and AWS Glue for more information.

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How Amazon grew an awkward side project into AWS, a behemoth that’s now 4 times bigger than its original shopping business

If you have touched your phone or computer today, you very likely have been touched by a vast business few outside the technology world are aware of. Maybe you’ve checked the Wall Street Journal or MarketWatch, traded a stock on Robinhood, bet on a football game through DraftKings , or posted on Pinterest or Yelp; ordered treats for Fido on Chewy or treats for yourself on DoorDash; submitted an expense report on Workday or made plans for the evening via Tinder, OkCupid, or Hinge. 

If so, you did it with the help of Amazon Web Services. The less glamorous sibling to Amazon’s operations in e-commerce, streaming video, and smart devices, AWS is no less ubiquitous, deploying millions of computers worldwide, humming away somewhere in the cloud.

For all those AWS customers the on-demand cloud computing platform isn’t just another vendor. They rely on it so heavily that it resembles a public utility—taken for granted, but essential to keep the machinery humming. In the past 12 months each of the companies mentioned above has stated in Securities and Exchange Commission filings that they “would be adversely impacted” if they lost their AWS service. Hundreds more companies— Netflix , Zoom , Intuit , Caesars Entertainment—have reported the same risk factor to the SEC in the past year. By the way, the SEC uses AWS. (So does Fortune .)

And those are but the tiniest fraction of AWS customers. AWS—initially run by Andy Jassy, who went on to succeed Jeff Bezos as Amazon’s CEO—won’t say how many customers it has, only that it provides computing power, data storage, and software to millions of organizations and individuals. Now, even as Amazon lays off a reported 10,000 workers, Wall Street analysts expect another blowout performance from its web services division. That’s probably why few if any of those staffing cuts will affect this relatively recession-proof part of Bezos’s empire. (Amazon won’t say how many of its 1.5 million employees work for AWS.)

For years AWS has brought in more profit than all other divisions of Amazon combined, usually by a wide margin. AWS’s operating profit last year, $18.5 billion, was nearly three times the operating profit reported by the rest of the company ($6.3 billion). AWS pulled in $58.7 billion of revenue in this year’s first nine months; if it were independent, it would easily rank in the Fortune 100.  

How did this offshoot of an online retailer come to rule the lucrative cloud-computing industry, towering over tech giants such as Microsoft and Google , which might have seemed better positioned to dominate?

AWS’s ascent is so unlikely that it demands an explanation. It reveals the power of a truly iconoclastic culture that, while at times ruthless, ultimately breeds innovation and preserves top talent by encouraging entrepreneurship.

The best-known origin story of AWS is that it started when Amazon had some spare computer capacity and decided to rent it out to other companies. That story won’t die, but it isn’t true. The real story traces a circuitous path that could easily have ended in a ditch. It’s grounded in a philosophy that still guides AWS’s progress.

“To me, it’s the concept of insurgents versus incumbents,” says Adam Selipsky, who became AWS’s CEO last year when his predecessor, Jassy, took over as Amazon CEO. Selipsky, 56, speaks quietly, conveying an understated intensity. “One thing that I think is really important, that we intentionally worry about all the time,” he says, is that “we continue to keep the customer need dancing in front of our eyes at all times.”

The real story of the AWS insurgency began with Amazon’s innovative responses to two problems. First: By the early 2000s, Amazon—still known mainly as an online bookseller—had built from scratch one of the world’s biggest websites, but adding new features had become frustratingly slow. Software engineering teams were spending 70% of their time building the basic elements any project would require—most important, a storage system and an appropriate computing infrastructure. Building those elements for projects at Amazon scale was hard, and all that work merely produced a foundation on which to build the cool new customer-pleasing features Amazon was seeking. Every project team was performing the same drudgery. Bezos and other Amazon managers started calling it “undifferentiated heavy lifting” and complaining that it produced “muck.” 

In response, Selipsky recalls, company leaders began to think, “Let’s build a shared layer of infrastructure services that all these teams can rely on, and none of them have to spend time on general capabilities like storage, compute capabilities, databases.” Amazon’s leaders didn’t think of it as an internal “cloud”—the term wasn’t widely used in the tech world yet—but that’s what it was.

The second problem involved other websites wanting to add links to Amazon products on their own pages. For example, a website about cooking might recommend a kitchen scale and include a link to the Amazon.com page for the product. Amazon was all for it, and would send them a bit of code they could plug into their site; if someone bought the product through the link, the site owner earned a fee. But as the program grew, cranking out bits of code for every affiliate site became overwhelming, and those affiliates’ website developers wanted to create their own links and product displays instead of the ones Amazon sent them. So in 2002 Amazon offered them a more advanced piece of software, enabling them to create far more creative displays. The new software was complicated. Users had to write software rather than just plug it in. Yet thousands of developers loved it immediately.

When Amazon launched a fuller, free version of the software building block a few months later, it enabled anyone, not just affiliates, to incorporate Amazon features into their sites. The surprise: A lot of the downloads were going to Amazon’s own software engineers. The building block turned out to be a proof of concept for the labor-lightening innovations that Amazon itself was looking for.

A picture was emerging. Amazon desperately needed to free its software developers from creating muck. Developers everywhere, not only its own, were starving for new tools that did just that. “We very quickly figured out that external developers had exactly the same problems as internal developers at Amazon,” Selipsky says.

But was that a business for Amazon? During a 2003 offsite at Bezos’s house, the company’s top managers decided that it could be. That decision was the turning point, especially significant because it could so easily have gone the other way. Amazon’s customers were consumers who bought “new, used, refurbished, and collectible items,” as the company told investors at the time. Why would anyone imagine this company could build a business selling technology services to software developers?

The decision to plunge ahead revealed a subtle distinction that outsiders didn’t understand. The world saw Amazon as an online retailer, but the company’s leaders never thought of it that way. They thought of it as “a technology company that had simply applied its technology to the retail space first,” Jassy later told Harvard Business School professors who were writing a case study. For that kind of company, AWS looked like a promising bet.

Coming out of the 2003 offsite, Jassy’s job was to build a team and develop AWS. He wrote a proposal for it as a cloud-computing business. The document, one of the famous six-pagers used at Amazon’s executive meetings instead of PowerPoint (which is banned), reportedly went through 31 revisions.

It took three years before AWS went live. In 2005 Jassy hired Selipsky from a software firm to run marketing, sales, and support, Selipsky recalls: “Amazon called and told me there was this initiative for something about turning the guts of Amazon inside out, but other companies could use it.” AWS’s first service, for data storage, “was such a novel concept that it was even hard to explain and hard for me to understand,” he says.

Wall Street didn’t get it. “I have yet to see how these investments are producing any profit,” a Piper Jaffray analyst said in 2006. “They’re probably more of a distraction than anything else.”

The rest of the world didn’t get it either. “I cannot tell you the number of times I got asked, with a quizzical look on people’s faces, ‘But what does this have to do with selling books?’ ” Selipsky recalls. “The answer, of course, was: AWS has nothing to do with selling books. But the technology we use to sell books has everything to do with AWS and what we can offer customers.” Those customers were software developers, an entirely new target market that baffled outsiders.

AWS was prepared for that reaction. One of Amazon’s principles reads in part: “As we do new things, we accept that we may be misunderstood for long periods of time.”

On the day in March 2006 when AWS finally launched its inaugural service—S3, for Simple Storage Service—Selipsky was at a trade show in Santa Clara, Calif., “in a windowless, internet-less conference room,” as he describes it, unable to learn how the launch was going. At day’s end he and a colleague ran outside to call Seattle for news. 

“We were told that 12,000 developers had signed up,” he says, a note of marvel still in his voice. “On the first day. It was just amazing.”

Five months later AWS launched its other foundational service, EC2, for Elastic Compute Cloud, which was also instantly popular. The revolution had begun. Instead of raising millions of dollars to buy servers and build data centers, startups could now get online with a credit card, and pay a monthly bill for just the computing power and storage they used. If their new app was a hit, they could immediately engage all the cloud services that they needed. If it bombed, they weren’t stuck with rooms of junk equipment. As a Silicon Valley entrepreneur and early AWS customer told Wired in 2008: “Infrastructure is the big guys’ most powerful asset. This levels the field.”

In response to that historic shift, AWS’s potential competitors did … nothing. “A business miracle happened,” Bezos told a conference years later. “This is the greatest piece of business luck in the history of business so far as I know. We faced no like-minded competition for seven years. I think the big established enterprise software companies did not see Amazon as a credible enterprise software company, so we had this incredible runway.”

Selipsky suspects an additional motivation: “They either didn’t believe this could be a real business, or they were so threatened by what it would do to their own business models, and the way they were overcharging customers, that they didn’t want to believe it.”

No one, not even at Amazon, foresaw how massive a business cloud computing would be, or AWS’s dominance in the space. To understand how this happened, it’s worth examining the company’s guiding principles.

Eye-roll alert: Every company has principles, missions, visions, values; the vast majority are indistinguishable and sound as if they were written by committees, which they probably were. Some of Amazon’s leadership principles, as they’re called—there are 16—sound that way, until they get a little “peculiar,” to use a favorite Amazonian word.

For example, principle No. 11 begins, “Earn trust.” Leaders, it explains, “are vocally self-critical, even when doing so is awkward or embarrassing. Leaders do not believe their or their team’s body odor smells of perfume.” This peculiarity is a badge of pride at Amazon; its web page for job seekers even says that its use of the principles “is just one of the things that makes Amazon peculiar.”

Not every Amazonian observes every principle all the time; in a company of 1.5 million employees, that’s not realistic. But Amazon’s batting average is high.

To answer the basic question of why a retailer would even think of creating AWS, consider principle No. 1, seemingly the hoariest of them all: “Customer obsession.” Amazon sees itself as a tech company and sees the world as 8 billion potential customers. That’s one reason AWS made sense for a bookseller.

“I cannot tell you the number of times I got asked … ‘But what does this have to do with selling books?’” Adam Selipsky, CEO, Amazon Web Services

Amazon allows new projects lots of time, as with AWS, in part to make sure decisions are based on data. An unusual principle states that leaders “work to disconfirm their beliefs.” Groupthink is comforting, contagious, and dangerous. Being able to invoke one of the principles enables doubters to speak up. 

“We have senior engineers who will stop a meeting and say, ‘We’ve got to disconfirm our beliefs—we’re going too far here without checking,’ ” says Mai-Lan Tomsen Bukovec, who oversees AWS’s storage services. “That’s actually kind of revolutionary in terms of corporate culture.”

It’s not a culture for everyone. Amazon is a famously demanding place to work, and there are plenty of stories of employees who found it to be too much. Media reports have criticized Amazon’s treatment of workers, and the company is battling unionization efforts at some of its e-commerce warehouses. It’s noteworthy that last year Amazon added a new leadership principle: “Strive to be Earth’s best employer.”

“It’s not good for our business and not good for our customers if we turn out great employees and burn them out, and they leave after a couple of years,” says Matt Garman, an early AWS employee who now oversees sales and marketing. “Sometimes there are people who don’t like the culture, don’t like those leadership principles. It’s not a good fit for them. People like the culture or they don’t like the culture, and I think that’s okay. But we want people here for the long term.”

Asked to describe AWS’s strategy, Tomsen Bukovec says, “That’s not a word we use a ton.” 

The foundation of conventional strategy, the subject of hundreds of books and articles, is understanding a company’s industry and competitors. That approach gets us nowhere with Amazon. What industry is it in? No one industry encompasses selling dog food and selling computing power. 

So does Amazon even have a strategy? “Yes,” says Ram Charan, an adviser to CEOs and boards, and coauthor of a book on Amazon’s management system. But “it’s not a competitive strategy,” he says. “It’s a customer strategy.” 

That’s a mind bender. Business is competition, and business strategy is inherently competitive strategy. Except that at Amazon it isn’t. If it had been—if Amazon had been conventionally competitor-focused—AWS probably wouldn’t exist. 

Colin Bryar, a former Amazon executive, says he’s often asked what Amazon is going to build next. Can it repeat what it did with AWS, create an out-of-the-blue business, unexpected and underestimated, in which it becomes dominant? “That’s not the first question Amazon asks,” Bryar says. “They ask, ‘What’s the next big customer problem we can go try to solve?’ ”

The word “big” is key. At Amazon’s size—analysts expect revenue exceeding $500 billion for 2022—small problems are simply not of interest. When company leaders identify a sufficiently big problem, they must then conclude that Amazon can solve it, and that customers will adopt the solution. Those are not easy or quick questions to answer.

Cloud computing will grow 20% annually through 2026, far faster than any other segment of infotech, according to the Gartner tech consulting firm. It’s no longer just smaller companies and startups who don’t want to invest in their own server systems. Many AWS customers are increasing their spend, and some “spend literally hundreds of millions of dollars per year on AWS,” says Gartner analyst Raj Bala, who sees the contracts. “I’m not shocked anymore to see a $200 million annual commitment, which is astonishing.”

Yet AWS’s dominance of the market will likely diminish even as its revenue grows. With a 44% share of the market, AWS has 20 points over Microsoft’s 24%—but that lead is shrinking, says Bala. “In the next five, six, seven years, that gap is going to be very, very narrow, if not equal.” That’s because “a lot of late adopter enterprises are coming to market,” he says, “and a lot of these folks will gravitate to Microsoft because they’ve got an existing contractual relationship with Microsoft.”

The narrowing gap with Microsoft is probably inevitable. AWS’s great challenge for the future is to maintain the discipline that made it a global colossus.

Losing that discipline is insidiously easy. Jim Collins, author of Good to Great , which identifies the factors shared by the world’s most successful companies, has also written an analysis of failure, How the Mighty Fall . Winners invariably maintain discipline, and loss of discipline is always an element of decline. One of the principle threats? Attempts to control workers by overregulating them. “Bureaucracy subverts discipline,” he tells Fortune. 

When a company is growing as fast as AWS, it can be tempting to weaken hiring standards. “As you grow, you start to bring in some of the wrong people,” he says, speaking of companies generally. “If they don’t get the intensity of being there, they shouldn’t be there, but if enough of them stay, you try to control them with bureaucracy. Then the right people get out, which creates a cycle.”

With success and growth come further threats to discipline. When a business is riding high, “easy cash erodes cost discipline, and that discipline is hard to recover once you lose it,” he says. Expansion brings risks, too: Responding desperately to deteriorating performance, the business bets on “undisciplined discontinuous leaps”—acquisitions or expansions for which it isn’t ready. 

At the top of its game, bigger and stronger than any competitor, AWS must now meet an enviable challenge but a challenge nonetheless: the curse of success. Its most crucial task is to maintain the unwavering rigor—the discipline—of its principles and processes.

Selipsky seems to understand the need. Asked to define his job, he is silent for several seconds. Then, quietly but emphatically, he says his job “is to ensure that the positive, productive, useful elements of what got us to this stage—that we hold those dear, and we safeguard them, and we don’t let them slip away. We don’t become incumbents.” 

Amazon’s next big, thorny problem to solve

What might be the next industry to get Amazon’s AWS-style mega-venture treatment? The leading candidate is health care. 

In 2018 Amazon bought PillPack, an online pharmacy, and last summer it paid $3.9 billion for One Medical, a membership-based primary-care provider operating across the U.S., saying in its announcement that “we think health care is high on the list of experiences that need reinvention.” 

No one would disagree. For a company that seeks big problems to solve, this may be the biggest opportunity of all. Health care is the largest sector of the U.S. economy, and the industry is growing fast worldwide. 

Data is the problem at the heart of health care’s inefficiency and unfathomable, wearisome customer experiences—and it’s possible that it could be the solution.

That data is staggering in quantity and mostly unstructured—handwritten notes and X-ray and lab reports, sometimes of life-and-death importance—in an industry that is the last bastion of fax machines. 

It’s a particularly attractive conundrum to Amazon because of the company’s dominance of cloud computing. AWS is already deeply entrenched in the industry, used by hospitals, pharma companies, equipment makers, insurers, pharmacy benefit managers, the Centers for Medicare and Medicaid Services, and more. 

Another potential advantage is Amazon’s massive international workforce and its enormous health care needs and expenses. Just as Amazon developed AWS by observing its own software needs and seeing them mirrored elsewhere, its own challenges as a growing corporate behemoth now may point the way to a new market opportunity.

This article appears in the December 2022/January 2023 issue of Fortune with the headline, “How Amazon’s cloud took the world by storm.”

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Real Stories of Cost Optimization on AWS

In this post, we will unveil real-life customer sagas where businesses harnessed the power of aws to supercharge their savings.

I am a Senior AWS Technical Account Manager, and in my role I provide consultative architectural and operational guidance delivered in the context of customers' applications and use-cases to help them achieve the greatest value from AWS. My role is not just about providing technical support but also helping our valued customers optimize their cloud resources to achieve cost-efficiency without sacrificing performance. In this blog post, we'll explore various strategies, tactics, and real-world examples of how I've assisted our large enterprise customers in their cost optimization endeavors. I'll share real-life use cases, metrics, and strategies that have proven effective. Stay tuned for a Bonus strategy at the end.

The Cost Optimization Framework

In the ever-evolving landscape of cloud computing, Enterprises are continually seeking ways to maximize the benefits of AWS while keeping costs in check. Before diving into specific customer cases, let's outline the fundamental framework for AWS cost optimization. It involves several key pillars:

Implementing Cloud Financial Management

Implementing Cloud Financial Management starts with the customer identifying key stakeholders from Finance and Technology, thus forming a cost optimization function that's responsible to establish and maintain cost awareness internally. A suite of AWS Services can help the customer achieve this, such as AWS Budgets and AWS Cost Anomaly Detection to accurately forecast AWS spend. Tools like AWS Cost Explorer and AWS Billing Console can be leveraged to derive real-time insights into AWS spend , while AWS Cost and Usage reports serve an excellent source to obtain fine-grain usage metrics. Additionally, customers can subscribe to AWS Blogposts to stay relevant to Roadmap items of interest.

Expenditure and Usage Awareness

Expenditure and Usage awareness among internal teams, can be enabled via a unified Account structure with AWS Organizations, allowing customers to seamlessly allocate costs and usage to the various Business Units within the company. Customers can setup and enable Cost Allocation tags as part of their charge-back strategy to hold internal product teams accountable for their AWS Costs and Usage.

Cost Effective Resources

Using purpose-built resource types for specific workloads is going to be key to cost savings. Other opportunities includes, Instance resizing for both Cost and Performance or leveraging managed services such as Amazon Aurora , Amazon ElastiCache and Amazon DynamoDB to minimize the overhead of managing and maintaining the servers. Customers can also take advantage of AWS' cost-effective pricing options such as Savings Plans , Reserved Instances or Spot for their workloads, saving significant amount of costs as compared to OnDemand.

Manage Demand and Supply

It is paramount for customers to keep their operating costs low. To facilitate that, customers can consider adopting auto-scaling across key AWS services such as Amazon EC2, Amazon DynamoDB and Amazon ElastiCache. This ensures that the customer only pays for the computing resources they need, and not have to overpay.

Optimizing over Time

In AWS, you optimize over time by reviewing new services and implementing them in your workload. As AWS releases new services and features, it is a best practice to review your existing architectural decisions to ensure that they remain cost effective. As your requirements change, be aggressive in decommissioning resources, components, and workloads that you no longer require.

Real-world Cost Optimization Stories

Case study 1: leveraging various aws pricing options.

A Digital AdExchange realized over 60% in cost savings by adopting AWS EC2 Spot for their real-time bidding application, while maintaining the same throughput. The customer updated their application to use disparate Instance Types (~20) and over 50% of those Instance types were used in the spot fleets that replaced the original auto-scaling groups, thus providing a significant amount of resistance to fluctuations in the spot market. The customer also implemented a log recovery pipeline to combat the problem of losing log data on terminated spot instances. The customer had unpredictable traffic patterns but needed cost predictability. So, in addition to Spot, we helped them implement a mixed Reservations strategy, combining EC2 Savings Plans for steady-state workloads and Compute Savings Plans for flexibility. While the EC2 Instance Savings Plans provided the customer with over 65% price benefits, the Compute Savings Plans unlocked over 60% in potential cost savings. This led to annual cost savings of over $1 million. Furthermore, Advertising technology (ad tech) companies use Amazon DynamoDB to store various kinds of marketing data, such as user profiles, user events, clicks, and visited links. Some of the use cases include real-time bidding (RTB), ad targeting, and attribution. These use cases require a high request rate (millions of requests per second), low and predictable latency, and reliability. As a fully managed service, DynamoDB allows ad tech companies to meet all of these requirements without having to invest resources in database operations. With accelerated DynamoDB costs Month-over-month, the customer quickly adopted DynamoDB Reserved Capacity to receive a significant discount over Provisioned Capacity (Read and Write) and this helped the customer save an estimated $1M annually. Lastly, the customer was also able to save ~$300k with ElastiCache RIs and $150k with OpenSearch RIs.

Case Study 2: Utilizing native AWS tools to optimize costs

One of our largest social media customers experienced a sudden but sustained spike in their AWS costs for a specific Business Unit. We implemented a comprehensive tagging strategy, enabling them to allocate costs with precision. This led to better cost accountability and improved budget management. We also set up AWS Cost and Usage reports to provide granular insights into Cost and Usage, and we were able to identify the key driver behind the cost increase. This proactive approach allowed the company to identify and address cost anomalies in real-time, saving them thousands of dollars. Additionally, it helped the customer gain visibility into escalating Compute and Database costs. AWS Trusted Advisor is a service that inspects your AWS environment and provides recommendations for optimizing your resources. For one of our largest social media customers, we utilized AWS Trusted Advisor, which identified Underutilized and Idle resources that could potentially be terminated savings the customer $200k monthly across Amazon EC2, EBS, RDS and Load Balancers. Furthermore, the tool also provided recommendations around. Lastly with AWS Compute Optimizer, the customer was able to uncover $60k in monthly savings achieved through EC2 Rightsizing recommendations.

As promised, here's the Bonus

AWS Graviton is a game-changer for cost optimization and performance in Cloud Computing. Graviton instances, powered by Arm-based processors, offer a compelling value proposition. Graviton instances typically come at a lower price point compared to their x86 counterparts, making them a cost-effective choice. They also consume less power and have a smaller carbon footprint, reducing operational costs and contributing to an organization's sustainability goals. For businesses with demanding workloads, this can translate into significant savings over time. Along with the cost benefits, the Graviton instances are also designed for performance and efficiency making it a lucrative choice for many types of workloads, especially those that are highly parallelizable, like web servers and microservices. A major streaming company whose key workloads are hosted on AWS were able to assess $1M in monthly net savings (20%) by adopting Graviton across Amazon EC2, RDS, ElastiCache and OpenSearch. This allowed the customer actively re-invest the realized savings into other growth areas such as Generative AI that helped accelerate their business outcomes.

As a AWS Technical Account Manager, I'm committed to staying at the forefront of these developments, ensuring that our customers have access to the latest cost optimization strategies and technologies. Cost optimization on AWS isn't a one-time task but a continuous journey. By leveraging rightsizing, reserved instances, spot instances, lifecycle policies, and effective cost allocation, we've helped numerous enterprise customers unlock substantial savings while maintaining or even improving their cloud workloads. The key takeaway is that cost optimization on AWS is achievable with the right strategies, tools, and a commitment to ongoing monitoring and improvement. As your partner in the cloud, I'm here to guide you on this journey, ensuring that your AWS infrastructure remains cost-efficient, agile, and aligned with your business objectives. In the world of AWS, the path to cost optimization is paved with data-driven insights, smart resource management, and a collaborative partnership between AWS and our valued customers. Together, we'll continue to optimize and thrive in the cloud.

Any opinions in this post are those of the individual author and may not reflect the opinions of AWS.

Cloud Case Studies

Learn how ClearScale customers are leveraging our services to drive innovation by designing, building, deploying, and managing sophisticated cloud applications and infrastructure on AWS

• Advertising and Marketing
• Agriculture
• Architecture and Engineering
• Consumer Services
• Financial Services
• Healthcare and Life Sciences
• Manufacturing
• Media and Entertainment
• Software and Internet
• Telecommunications
• Application Development
• Application Modernization
• Business Applications
• Data and Analytics
• Generative AI
• Google Cloud
• Managed Services
• Microsoft Azure
• Mobile and Web
• Windows Workloads
• ACR - Landing Zone
• ACR - Data Lake
• ADCO Electrical Corporation
• AdvisoryCloud
• Axiom Cloud
• BresoTec Inc
• Canoe Intelligence
• CareCentrix
• Center for Advanced Defense Studies
• Cloud Agronomics
• ComissionTrac
• CompoSecure
• Conserve With Us
• Core Group Resources
• CPS - App Development
• CPS - Machine Learning
• Criteria Corp
• DealerSocket
• Decisiv - AWS Infrastructure
• Decisiv - Machine Learning
• Decisiv - Security
• DiscoverX Corporation
• Dollar Tree
• Education.com
• eTeamSponsor
• FieldRoutes
• Fifty Flowers
• First Street Foundation
• Franklin Young
• Gaia Online
• GK Data Solutions
• Globe and Mail
• Hawthorne Effect
• Health-e-MedRecord
• Influence Health
• In Touch EMR
• J.J.Keller & Associates
• Jonas Fitness
• Kohn Pedersen Fox Associates
• MaiaLearning
• Media Company
• Newton’s Law
• Public Broadcasting Service
• QMI Manufacturing
• Quik! - Data Management
• Quik! - MSP
• Quik! - SOC 2 Audit
• RF-SMart - Serverless Computing
• RF-Smart - Disaster Recovery
• ROI Solutions
• San Jose Water Company
• SavvyMoney - Cloud Modernization
• SavvyMoney - MSP
• SavvyMoney - App Modernization
• Shinola Detroit
• Sierra Club
• Spark Networks SE
• Spartan Capital Intelligence
• Spoke Safety
• Terror Films
• The Responsible Minerals Initiative
• The Salvation Army - Mobile App
• The Salvation Army - App Modernization
• Track Revenue
• TriFin Labs
• USA Baseball
• VisualizeHR
• Willamette Dental Group
• World Wildlife Fund
• Young, Black, and Fabulous
• Your OneSource Solution
• Zeta Interactive

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• Harvard Business School →
• Faculty & Research →
• October 2008 (Revised February 2012)
• HBS Case Collection

Amazon Web Services

• Format: Print
• | Language: English
• | Pages: 25

About The Authors

Robert S. Huckman

Gary P. Pisano

More from the authors.

• March–April 2024
• Harvard Business Review

Retailers and Health Systems Can Improve Care Together

How fast should your company really grow.

• Faculty Research

Health Care Payment in the United States

• Retailers and Health Systems Can Improve Care Together  By: Robert S. Huckman, Vivian S. Lee and Bradley R Staats
• How Fast Should Your Company Really Grow?  By: Gary P. Pisano
• Health Care Payment in the United States  By: Robert S. Huckman, Jeff Charca and Craig Garthwaite

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The 12 AWS Certifications: Which is Right for You and Your Team?

As companies increasingly shift workloads to the public cloud, cloud computing has moved from a nice-to-have to a core competency in the enterprise. This shift requires a new set of skills to design, deploy, and manage applications in cloud computing.

As the market leader and most mature provider in the cloud computing space, analysts such as Gartner consider AWS a thought leader and point of reference for all of its competitors . Actually, AWS continues to lead in public cloud adoption, and it currently offers 12 certifications that cover both foundational and specialty cloud computing topics.

Why choose the right AWS certification ? Here’s why it matters.

Choosing the right AWS certification: What’s the value?

Getting AWS certified shows that you have some of the most in-demand (and profitable) skills as validated by one of the most recognizable entities in cloud computing. In the enterprise, certification demonstrates a shared understanding of a platform, a shared terminology, and a certain level of cloud expertise that can speed up time to value for cloud projects.

But as a tech leader, how do you know which certifications to guide your team towards, and how do you assess their skill level/efficiency? Fill out the form and request a free demo! Our tech skill assessments let you save time by identifying the exact skills your team needs.

Fill out the form below and get a free demo!

Why is aws certification important.

Even as enterprises adopt multi-cloud strategies, this doesn’t diminish the importance of an AWS certification – quite the opposite. With more than one million customers, AWS is still the provider of choice for public cloud adoption, where 75% of enterprises and 71% of SMBs are running applications (according to the 2023 Flexera State of the Cloud Report ).

Candidate certifications

AWS certifications themselves stand out for their rigor and thoroughness in evaluating a candidate’s skills, with an emphasis on hands-on experience and best practices . For executives overseeing an IT team, pursuing AWS certification can be one of the most effective ways to bolster the foundational knowledge and skills needed to work with AWS services and solutions down the road and benchmark the more advanced members of your team.

Employer certifications

In the enterprise, the core training materials used to prepare for AWS certifications are a valuable component in a company’s own internal training path . As IT environments become more customized and requirements for new skills grow, an increasing number of companies are building their own certification programs. Many of them are using vendor certification training paths in conjunction with internal training materials to stand up certification tracks specific to their business needs.

Cloud Academy lets you do just that! Ask for a free demo and find out how Cloud Academy can be integrated into your company and help you achieve your business goals.

How long does it take to become AWS certified?

With a full-time job and other commitments, investing 80 hours of study usually takes two months. If you are entirely new to AWS, we recommend approximately 120 hours or three months to prepare. Start with the fundamentals, and then move to the Solutions Architect – Associate Learning Path.

Which AWS certification is best?

AWS currently offers 12 certifications: a foundational certification, three associate-level certifications, two professional-level certifications, and six specialty certifications. You can find a full overview of all Learning Paths to prepare for the certifications on the Cloud Academy’s AWS Certifications page .

• AWS Certified Cloud Practitioner (CLF-C01)
• AWS Certified Developer – Associate (DVA-C02)
• AWS Certified SysOps Administrator – Associate (SOA-C02)

AWS Certified Solutions Architect – Associate (SAA-C03)

• AWS Certified DevOps Engineer – Professional (DOP-C02)
• AWS Certified Solutions Architect – Professional (SAP-C02)
• AWS Certified Advanced Networking – Specialty (ANS-C01)
• AWS Certified Security – Specialty (SCS-C01)
• AWS Certified Machine Learning – Specialty (MLS-C01)
• AWS Certified Database – Specialty (DBS-C01)
• AWS Certified Data Analytics – Specialty (DAS-C01)
• AWS Certified SAP on AWS – Specialty (PAS-C01)

How do I become AWS certified?

While there are no set-in-stone steps to studying for the AWS certification, these steps are the most straightforward.

• Enroll in an AWS training class, such as any of the ones mentioned in this article. They will certainly increase your knowledge of cloud computing and AWS.
• Review any Study or Exam Guides available.
• Read multiple AWS whitepapers. These hold some invaluable information, which may answer many of your questions.
• Practice, practice, practice. Practice exams will help ease any worries or stress you may be having about the certification exam.
• Schedule the exam once you are ready. It typically takes anywhere from 80-120 hours of practice/studying to be prepared for the exam based on experience and the certification you are pursuing.

Bringing your team up to speed on AWS can take time you may not have. But with our Cloud Certification Fast-track program, you can crush your certification goals with direct support from our team of cloud experts. Custom training, visibility into progress, and end-to-end program management are just some of the features. Contact our team today to find out how the program works.

Let’s take a closer look at each exam.

Foundational Certification

Aws certified cloud practitioner.

The AWS Certified Cloud Practitioner is an entry-level certification designed to validate a candidate’s overall understanding of the AWS cloud.

• Recommendations: At least six months of general AWS cloud experience in any role (technical, managerial, sales, etc.)
• Format: Multiple choice & Multiple response questions
• Length: 90 minutes
• Cost: 100 USD

Areas Covered:

• Understanding of basic AWS architectural principles
• The value proposition of the AWS cloud
• Key AWS services and their common use cases
• Basic security and compliance, the shared responsibility model for security
• Core deployment and operating principles
• Cloud costs and economics and billing practices

Prepare for the Foundational Certification, with Cloud Academy’s Cloud Practitioner Certification Preparation for AWS Learning Path.

Associate-Level Certifications

This certification is the most popular AWS certification overall for tech team leaders, as it provides a solid foundation in AWS cloud computing. When evaluating new hires, it demonstrates that the holder possesses the skills needed to design, deploy, and manage applications on AWS.

The AWS Certified Solutions Architect – Associate exam is designed for those with some experience in designing distributed applications . Candidates will need to be able to demonstrate their ability to design, manage, and implement applications using tools and services on the AWS platform. This exam was updated in August 2022 to include more AWS services and best practices.  More information on this can be found here .

• Format: Multiple-choice, multiple-response
• Time: 130 minutes 
• Cost: 150 USD
• Network technologies and how they work in AWS
• How AWS-based applications work and how client interfaces connect to the AWS platform
• How to build secure and reliable applications on the AWS platform
• Deploying hybrid systems – those with an on-premises data center and AWS components
• The exam domains include the design of highly available, scalable and performant systems, (requires familiarity with AWS infrastructure and concepts), implementation and deployment in AWS, AWS-related data security practices, and cost optimization techniques

Prepare for the AWS Certified Solutions Architect Associate with Cloud Academy’s Solutions Architect – Associate Certification Preparation for AWS Learning Path .

AWS Certified Developer – Associate

The AWS Certified Developer – the Associate exam is all about developing and maintaining AWS-based applications. You will need to know how to write actual code that uses AWS software to access AWS applications from within your custom business applications.

• Time: 130 minutes
• Understanding the basic AWS architecture and the core AWS services
• Hands-on experience designing, developing, deploying, debugging, and maintaining applications
• Working knowledge of applications that utilize key AWS services such as AWS databases, notifications, workflow services, and services for storage and change management services

Prepare for this certification with Cloud Academy’s Developer – Associate Certification Preparation for AWS Learning Path.

AWS Certified SysOps Administrator – Associate

The AWS Certified SysOps Administrator – the Associate exam is the only certification that is fully geared toward system administrators . Passing this exam requires both technical expertise and conceptual knowledge of the operational aspects of the AWS platform. Previous experience as a Linux or Windows administrator will be a plus.

• Format: Multiple-choice, multiple-response, and Exam lab.  Exam labs contain a scenario that is composed of a set of tasks to perform in the AWS Management Console or AWS CLI
• Time: 180 minutes
• Deploying applications to the AWS platform across distributed architectures
• Sending and receiving data between data centers and multi-VPC architectures
• Selecting the appropriate AWS services to meet an organization’s needs
• Provisioning, managing, and securing systems in an AWS environment

Prepare for this certification with Cloud Academy’s SysOps Administrator – Associate Certification Preparation for AWS Learning Path.

Professional-level Certifications

Aws certified solutions architect – professional.

A professional AWS architect is someone who can evaluate an organization’s requirements and make architectural recommendations for implementing and deploying applications on AWS. The Certified Solutions Architect Professional certification requires a high degree of technical skill and experience designing AWS-based applications. This exam was updated in November 2022 to include more AWS services and best practices.  More information on this can be found here .

• Recommendations: Two years of hands-on experience designing and deploying cloud architecture on AWS and best practice knowledge of multi-application architectural design is recommended.
• Format: Multiple-choice, multiple-answer
• Cost: 300 USD
• Best practices for architecting the designing scalable applications on AWS
• Selecting the right AWS service for the requirements of an application ensuring its highly available, fault-tolerant and reliable
• Migration of complex application systems to AWS across a multi-tier architecture design
• Knowledge of cost optimization strategies

Prepare for this certification with Cloud Academy’s Solutions Architect – Professional Certification Preparation for AWS Learning Path .

AWS Certified DevOps Engineer – Professional

The DevOps Engineer certification is all about provisioning, operating, and managing applications on the AWS platform. This exam focuses heavily on continuous delivery (CD) and the automation of processes , two fundamental concepts of the DevOps movement.

• Recommendations: Experience in provisioning and managing AWS-based applications, as well as a firm understanding of modern application development such as the agile development methodology, is recommended.
• Format: Multiple-choice, multiple answers
• The basics of modern CD methodologies
• How to implement and manage CD systems
• Set up, monitoring, security controls, and logging systems on AWS
• How to implement highly available, scalable, and self-healing systems on AWS
• How to design and manage tools that enable automation of production operations

Prepare for this certification with Cloud Academy’s DevOps Engineer – Professional Certification Preparation for AWS Learning Path .

Specialty Certifications

Aws certified data analytics – specialty.

The AWS Certified Data Analytics – Specialty certification is for those with a background in data analytics and experience using AWS services for designing and architecting big data solutions. It is designed to validate a candidate’s experience in extracting value from data using AWS services.

• Architecting best practices for implementing core AWS big data services
• Designing, maintaining, and visualizing data
• AWS tools for automating data analysis
• Security best practices for data analytics solutions
• AWS services covered include: Kinesis , Athena , Quicksight , and Rekognition

Prepare for this exam with Cloud Academy’s AWS Certified Data Analytics – Specialty (DAS-C01) Certification Preparation for AWS Learning Path .

AWS Certified Advanced Networking – Specialty

The AWS Certified Advanced Networking – Specialty certification was last updated in July 2022 and is designed to validate a candidate’s skills and experience in connection with performing complex networking tasks on AWS and hybrid IT networking architecture at scale. Candidates should have a background in architecting and implementing network solutions and advanced knowledge of networking on AWS.  

• Time: 170 minutes
• Designing, developing, and deploying cloud solutions with AWS
• Implementing core services according to architectural best practices
• Automation for AWS tasks for network deployments
• Security and compliance design and implementation
• Network optimization and troubleshooting

Prepare for this certification with Cloud Academy’s Advanced Networking – Specialty Certification Preparation for AWS Learning Path .

AWS Certified Security – Specialty

As a tech manager, you know best that security is one of the most significant issues holding back cloud adoption. Cloud Academy’s training library focuses deeply on IT Security, allowing your team to stay up to date with new security breaches and ways to resolve them. If you’re interested in understanding how to keep your cloud environment secure with Cloud Academy, contact us and request a free demo!

Going back to the certification, the AWS Certified Security – Specialty certification covers topics that security pros and teams need to master security fundamentals , follow best practices, and build deep knowledge in key services unique to the AWS platform. It is designed to validate your AWS knowledge across security topics such as data protection and encryption, infrastructure security, incident response, identity, and access management, monitoring and logging.

• Use a variety of AWS services to select the appropriate level of security based on your deployments and the sensitivity of your data
• Select the most appropriate data protection techniques including encryption mechanisms
• Implement logging and monitoring solutions to detect and analyze security vulnerabilities and weaknesses within your infrastructure
• AWS services include: AWS Identity and Access Management , AWS CloudTrail , AWS Config , Amazon Inspector , AWS Trusted Advisor , Amazon GuardDuty , Amazon CloudWatch , Amazon Key Management Service

Prepare for this certification with Cloud Academy’s Security – Specialty Certification Preparation for AWS Learning Path

AWS Certified Machine Learning – Specialty

The AWS Certified Machine Learning – Specialty certification validates your ability to create, implement, and maintain machine learning solutions for a range of business problems. This exam is for anyone who performs a development or data science role. Candidates should have one to two years of experience using ML and/or deep learning on the AWS Cloud.

• Choosing and defending the best ML approach for a given business problem
• Identifying the relevant AWS solutions to create and deploy your ML solution
• Designing and implementing cost-optimized, scalable, reliable, and secure ML solutions

Prepare for this certification with Cloud Academy’s Machine Learning – Specialty Certification Preparation for AWS Learning Path .

AWS Certified Database – Specialty

The AWS Certified Database – Specialty certification validates that you have an overall comprehension of all the AWS database services offered, as well as how to bring value to your business through optimized database integration and architecting. This exam is for anyone who works closely with databases and implements DB solutions. Candidates should at least two years of experience working with both AWS Cloud-based and on-premises relational and NoSQL databases.

• Database Design
• Deployment and Migration
• Management and Operations
• Monitoring and Troubleshooting

Prepare for this certification with Cloud Academy’s AWS Certified Database – Specialty (DBS-C01) Certification Preparation Learning Path .

AWS Certified SAP on AWS – Specialty

The newest AWS specialty certification is the AWS Certified SAP on AWS – Specialty, which was released in April 2022. This exam has been designed for individuals wanting to demonstrate critical knowledge related to SAP solutions and workloads running in the AWS Cloud.

• Designing an SAP solution that runs in the AWS Cloud in adherence with the AWS Well-Architected Framework as well as SAP certification and support requirements
• Implementing new SAP workloads on AWS
• Migrating existing SAP workloads to AWS
• Operating SAP workloads on AWS

Prepare for this certification with Cloud Academy’s Certified SAP on AWS – Specialty (PAS-C01) Certification Preparation Learning Path .

Recertification and Staying Up-to-Date

The number of new AWS features and services increases every year. To demonstrate continued expertise and knowledge of best practices for the most up to date AWS services, certification holders are required to recertify every three years .

If you hold the Cloud Practitioner certification, it will automatically be renewed if you pass an  Associate level certification.  Also, if you hold the Solutions Architect – Associate exam, this will be renewed if you pass the Solutions Architect – Professional exam.  Similarly, if you hold the SysOps Administrator – Associate or Developer – Associate certification, then by passing the DevOps Engineer – Professional exam it will automatically renew these associate levels too.  Passing any Associate or Professional certification will also renew your Cloud Practitioner exam if you currently hold it.  

Remember that certifications are broadly representative of your knowledge at a specific point in time. The real AWS mavens don’t wait until their certification expires – they build good habits to stay current and are obsessed with learning. Here are some tips for keeping your skills current.

• Read, a lot. Subscribe to AWS Release Notes newsletter, the Cloud Academy AWS blog posts , and others to receive the latest updates.
• Learn by doing. Get hands-on practice experimenting with new services in Machine Learning and AI using Cloud Academy Hands-on Labs .
• Attend re:Invent. Enough said.
• Test your skills. Take AWS practice exams , regardless of whether you’re sitting for the exam or not.
• Suggest training at work. Excellence begets excellence. If you surround yourself with a team of well-informed individuals who strive for excellence, you’ll move faster together.

If you are a tech team leader, you want to make sure your tech talents stay up to date with the latest releases and certifications. But bringing your team up to speed on AWS can take time you may not have. With our Cloud Certification Fast-track program, you can crush your certification goals with direct support from our team of cloud experts. Custom training, visibility into progress, and end-to-end program management are just some of the features. Contact our team today and request a free demo to find out how the program works.

Frequently Asked Questions (FAQ)

This largely depends on the candidate’s existing experience and knowledge of AWS, in addition to the certification level looking to be obtained, Practitioner, Associate, Professional or Specialty. AWS states in their exam guide for each certification a suggested prerequisite amount of experience before tackling the exam. For example, the AWS Solutions Architect – Associate ( SAA-C03 ), suggests that you should have 1 year of hands-on experience designing available, cost-effective, fault-tolerant, and scalable distributed systems on AWS.

However, with dedication to your study and gaining hands-on practical experience using your own ‘free-tier’ account to get familiarity with the console and the services, you can pass your certifications without meeting these criteria. It is important to maintain a study schedule, and I would suggest at least 1 hour of study per day for the Practitioner and Associate levels, but aim to immerse yourself more each day for the Professional and Specialty levels.

How much does it cost to get AWS certified?

The prices of the exams are different based on the level of the certification:

• Practitioner = $100
• Associate = $150
• Professional = $300
• Specialty = $300

What are the different levels of AWS certification?

There are 4 different levels of certification with AWS

• Practitioner: This is considered the foundation level when starting your certification journey with AWS and is a recommended and optional step before taking the Associate level certifications.
• Associate: These certifications require more experience than the Practitioner, and you should have some hands-on experience in provisioning resources in addition to some problem-solving skills in AWS.
• Professional: Although you can take the professional level certifications first, it’s recommended to attain at least the associate level certifications first to provide a base-level knowledge of AWS that is required to take the more advanced professional level certifications. Before taking this level of certification you must have a comprehensive understanding of many different attributes of how to run, optimize, and troubleshoot solutions within AWS.
• Specialty: The Specialty level certifications hone in on one particular domain within AWS, for example, ‘Security’ or ‘Databases’, and therefore require deep technical knowledge and experience within that particular topic. These are comparable to the Professional level certification with regards to difficulty.

Which certification is best in AWS?

All AWS certifications are important and are a great asset to have from a professional standpoint. Deciding which one to take, or which one is ‘best’ largely depends on your interests, your role, and where you would like to take your career.

For example, If you enjoy working in the networking and architectural space, then the following route would be a great fit:

• AWS Cloud Practitioner
• AWS Solutions Architect – Associate
• AWS Solutions Architect – Professional
• Networking Specialty

However, if you were a keen developer or were looking to move into application development, then you might select a different route:

• AWS Developer – Associate
• AWS DevOps Engineer – Professional

So it really depends on what you are trying to achieve as an individual, and where you want to take your career.

Are AWS certifications worth it?

Any certification that demonstrates your knowledge and expertise within the IT industry is certainly worth obtaining. In a market that is full of competition, being able to stand out above a crowd can help you get noticed and put you on your journey to achieve your professional goals.

If there are a number of candidates applying for a position, and all have the same credentials and experience, but one of them has a number of recognized AWS credentials to reinforce their knowledge, then this goes a long way in making you the chosen candidate.

It is not just about validating your knowledge however, it says a lot about you as a person. It shows commitment, dedication, the willingness to learn, the drive to stay at the forefront of innovation, and sometimes this demonstrates more to people than what the actual certification stands for.

Can I get AWS certifications online?

Yes, you can now take AWS certifications online and from the comfort of your own home. There are some points that you need to be aware of all of which can be found online.

However to summarize, here are the key elements to be aware of:

• You must be able to communicate with an English, Japanese, or Mandarin-speaking proctor. Exams can be taken in different languages, but communication with the proctor will be in English (Pearson VUE also supports online proctoring in Japanese and PSI supports online proctoring in Mandarin)
• You must ensure that your computer meets the system requirements for online proctoring
• When taking the exam, you will need to be in a private and quiet place, and you must ensure that you will not be interrupted
• Unlike in certification centers, you are NOT allowed to leave your workstation or move out of sight from your webcam during the online exam
• Online proctoring is now available from both Pearson VUE or PSI (in mainland China, you must use PSI).

Want to understand how Cloud Academy can help your team get AWS certified and always stay up to date?

With our Cloud Certification Fast-track program, you can crush your certification goals with direct support from our team of cloud experts. Custom training, visibility into progress, and end-to-end program management are just some of the features. Fill out the form to get a free demo and find out how the program works.

What is cloud computing?

With cloud computing, organizations essentially buy a range of services offered by cloud service providers (CSPs). The CSP’s servers host all the client’s applications. Organizations can enhance their computing power more quickly and cheaply via the cloud than by purchasing, installing, and maintaining their own servers.

The cloud-computing model is helping organizations to scale new digital solutions with greater speed and agility—and to create value more quickly. Developers use cloud services to build and run custom applications and to maintain infrastructure and networks for companies of virtually all sizes—especially large global ones. CSPs offer services, such as analytics, to handle and manipulate vast amounts of data. Time to market accelerates, speeding innovation to deliver better products and services across the world.

What are examples of cloud computing’s uses?

Get to know and directly engage with senior mckinsey experts on cloud computing.

Brant Carson is a senior partner in McKinsey’s Vancouver office; Chandra Gnanasambandam and Anand Swaminathan are senior partners in the Bay Area office; William Forrest is a senior partner in the Chicago office; Leandro Santos is a senior partner in the Atlanta office; Kate Smaje is a senior partner in the London office.

Cloud computing came on the scene well before the global pandemic hit, in 2020, but the ensuing digital dash  helped demonstrate its power and utility. Here are some examples of how businesses and other organizations employ the cloud:

• A fast-casual restaurant chain’s online orders multiplied exponentially during the 2020 pandemic lockdowns, climbing to 400,000 a day, from 50,000. One pleasant surprise? The company’s online-ordering system could handle the volume—because it had already migrated to the cloud . Thanks to this success, the organization’s leadership decided to accelerate its five-year migration plan to less than one year.
• A biotech company harnessed cloud computing to deliver the first clinical batch of a COVID-19 vaccine candidate for Phase I trials in just 42 days—thanks in part to breakthrough innovations using scalable cloud data storage and computing  to facilitate processes ensuring the drug’s safety and efficacy.
• Banks use the cloud for several aspects of customer-service management. They automate transaction calls using voice recognition algorithms and cognitive agents (AI-based online self-service assistants directing customers to helpful information or to a human representative when necessary). In fraud and debt analytics, cloud solutions enhance the predictive power of traditional early-warning systems. To reduce churn, they encourage customer loyalty through holistic retention programs managed entirely in the cloud.
• Automakers are also along for the cloud ride . One company uses a common cloud platform that serves 124 plants, 500 warehouses, and 1,500 suppliers to consolidate real-time data from machines and systems and to track logistics and offer insights on shop floor processes. Use of the cloud could shave 30 percent off factory costs by 2025—and spark innovation at the same time.

That’s not to mention experiences we all take for granted: using apps on a smartphone, streaming shows and movies, participating in videoconferences. All of these things can happen in the cloud.

Learn more about our Cloud by McKinsey , Digital McKinsey , and Technology, Media, & Telecommunications  practices.

How has cloud computing evolved?

Going back a few years, legacy infrastructure dominated IT-hosting budgets. Enterprises planned to move a mere 45 percent of their IT-hosting expenditures to the cloud by 2021. Enter COVID-19, and 65 percent of the decision makers surveyed by McKinsey increased their cloud budgets . An additional 55 percent ended up moving more workloads than initially planned. Having witnessed the cloud’s benefits firsthand, 40 percent of companies expect to pick up the pace of implementation.

The cloud revolution has actually been going on for years—more than 20, if you think the takeoff point was the founding of Salesforce, widely seen as the first software as a service (SaaS) company. Today, the next generation of cloud, including capabilities such as serverless computing, makes it easier for software developers to tweak software functions independently, accelerating the pace of release, and to do so more efficiently. Businesses can therefore serve customers and launch products in a more agile fashion. And the cloud continues to evolve.

Introducing McKinsey Explainers : Direct answers to complex questions

Cost savings are commonly seen as the primary reason for moving to the cloud but managing those costs requires a different and more dynamic approach focused on OpEx rather than CapEx. Financial-operations (or FinOps) capabilities  can indeed enable the continuous management and optimization of cloud costs . But CSPs have developed their offerings so that the cloud’s greatest value opportunity is primarily through business innovation and optimization. In 2020, the top-three CSPs reached $100 billion  in combined revenues—a minor share of the global $2.4 trillion market for enterprise IT services—leaving huge value to be captured. To go beyond merely realizing cost savings, companies must activate three symbiotic rings of cloud value creation : strategy and management, business domain adoption, and foundational capabilities.

What’s the main reason to move to the cloud?

The pandemic demonstrated that the digital transformation can no longer be delayed—and can happen much more quickly than previously imagined. Nothing is more critical to a corporate digital transformation than becoming a cloud-first business. The benefits are faster time to market, simplified innovation and scalability, and reduced risk when effectively managed. The cloud lets companies provide customers with novel digital experiences—in days, not months—and delivers analytics absent on legacy platforms. But to transition to a cloud-first operating model, organizations must make a collective effort that starts at the top. Here are three actions CEOs can take to increase the value their companies get from cloud computing :

• Establish a sustainable funding model.
• Develop a new business technology operating model.
• Set up policies to attract and retain the right engineering talent.

How much value will the cloud create?

Fortune 500 companies adopting the cloud could realize more than $1 trillion in value  by 2030, and not from IT cost reductions alone, according to McKinsey’s analysis of 700 use cases.

For example, the cloud speeds up design, build, and ramp-up, shortening time to market when companies have strong DevOps (the combination of development and operations) processes in place; groups of software developers customize and deploy software for operations that support the business. The cloud’s global infrastructure lets companies scale products almost instantly to reach new customers, geographies, and channels. Finally, digital-first companies use the cloud to adopt emerging technologies and innovate aggressively, using digital capabilities as a competitive differentiator to launch and build businesses .

If companies pursue the cloud’s vast potential in the right ways, they will realize huge value. Companies across diverse industries have implemented the public cloud and seen promising results. The successful ones defined a value-oriented strategy across IT and the business, acquired hands-on experience operating in the cloud, adopted a technology-first approach, and developed a cloud-literate workforce.

Learn more about our Cloud by McKinsey and Digital McKinsey practices.

What is the cloud cost/procurement model?

Some cloud services, such as server space, are leased. Leasing requires much less capital up front than buying, offers greater flexibility to switch and expand the use of services, cuts the basic cost of buying hardware and software upfront, and reduces the difficulties of upkeep and ownership. Organizations pay only for the infrastructure and computing services that meet their evolving needs. But an outsourcing model  is more apt than other analogies: the computing business issues of cloud customers are addressed by third-party providers that deliver innovative computing services on demand to a wide variety of customers, adapt those services to fit specific needs, and work to constantly improve the offering.

What are cloud risks?

The cloud offers huge cost savings and potential for innovation. However, when companies migrate to the cloud, the simple lift-and-shift approach doesn’t reduce costs, so companies must remediate their existing applications to take advantage of cloud services.

For instance, a major financial-services organization  wanted to move more than 50 percent of its applications to the public cloud within five years. Its goals were to improve resiliency, time to market, and productivity. But not all its business units needed to transition at the same pace. The IT leadership therefore defined varying adoption archetypes to meet each unit’s technical, risk, and operating-model needs.

Legacy cybersecurity architectures and operating models can also pose problems when companies shift to the cloud. The resulting problems, however, involve misconfigurations rather than inherent cloud security vulnerabilities. One powerful solution? Securing cloud workloads for speed and agility : automated security architectures and processes enable workloads to be processed at a much faster tempo.

What kind of cloud talent is needed?

The talent demands of the cloud differ from those of legacy IT. While cloud computing can improve the productivity of your technology, it requires specialized and sometimes hard-to-find talent—including full-stack developers, data engineers, cloud-security engineers, identity- and access-management specialists, and cloud engineers. The cloud talent model  should thus be revisited as you move forward.

Six practical actions can help your organization build the cloud talent you need :

• Find engineering talent with broad experience and skills.
• Balance talent maturity levels and the composition of teams.
• Build an extensive and mandatory upskilling program focused on need.
• Build an engineering culture that optimizes the developer experience.
• Consider using partners to accelerate development and assign your best cloud leaders as owners.
• Retain top talent by focusing on what motivates them.

How do different industries use the cloud?

Different industries are expected to see dramatically different benefits from the cloud. High-tech, retail, and healthcare organizations occupy the top end of the value capture continuum. Electronics and semiconductors, consumer-packaged-goods, and media companies make up the middle. Materials, chemicals, and infrastructure organizations cluster at the lower end.

Nevertheless, myriad use cases provide opportunities to unlock value across industries , as the following examples show:

• a retailer enhancing omnichannel  fulfillment, using AI to optimize inventory across channels and to provide a seamless customer experience
• a healthcare organization implementing remote heath monitoring to conduct virtual trials and improve adherence
• a high-tech company using chatbots to provide premier-level support combining phone, email, and chat
• an oil and gas company employing automated forecasting to automate supply-and-demand modeling and reduce the need for manual analysis
• a financial-services organization implementing customer call optimization using real-time voice recognition algorithms to direct customers in distress to experienced representatives for retention offers
• a financial-services provider moving applications in customer-facing business domains to the public cloud to penetrate promising markets more quickly and at minimal cost
• a health insurance carrier accelerating the capture of billions of dollars in new revenues by moving systems to the cloud to interact with providers through easier onboarding

The cloud is evolving  to meet the industry-specific needs of companies. From 2021 to 2024, public-cloud spending on vertical applications (such as warehouse management in retailing and enterprise risk management in banking) is expected to grow by more than 40 percent annually. Spending on horizontal workloads (such as customer relationship management) is expected to grow by 25 percent. Healthcare and manufacturing organizations, for instance, plan to spend around twice as much on vertical applications as on horizontal ones.

Learn more about our Cloud by McKinsey , Digital McKinsey , Financial Services , Healthcare Systems & Services , Retail , and Technology, Media, & Telecommunications  practices.

What are the biggest cloud myths?

Views on cloud computing can be clouded by misconceptions. Here are seven common myths about the cloud —all of which can be debunked:

• The cloud’s value lies primarily in reducing costs.
• Cloud computing costs more than in-house computing.
• On-premises data centers are more secure than the cloud.
• Applications run more slowly in the cloud.
• The cloud eliminates the need for infrastructure.
• The best way to move to the cloud is to focus on applications or data centers.
• You must lift and shift applications as-is or totally refactor them.

How large must my organization be to benefit from the cloud?

Here’s one more huge misconception: the cloud is just for big multinational companies. In fact, cloud can help make small local companies become multinational. A company’s benefits from implementing the cloud are not constrained by its size. In fact, the cloud shifts barrier to entry skill rather than scale, making it possible for a company of any size to compete if it has people with the right skills. With cloud, highly skilled small companies can take on established competitors. To realize the cloud’s immense potential value fully, organizations must take a thoughtful approach, with IT and the businesses working together.

For more in-depth exploration of these topics, see McKinsey’s Cloud Insights collection. Learn more about Cloud by McKinsey —and check out cloud-related job opportunities if you’re interested in working at McKinsey.

Articles referenced include:

• “ Six practical actions for building the cloud talent you need ,” January 19, 2022, Brant Carson , Dorian Gärtner , Keerthi Iyengar, Anand Swaminathan , and Wayne Vest
• “ Cloud-migration opportunity: Business value grows, but missteps abound ,” October 12, 2021, Tara Balakrishnan, Chandra Gnanasambandam , Leandro Santos , and Bhargs Srivathsan
• “ Cloud’s trillion-dollar prize is up for grabs ,” February 26, 2021, Will Forrest , Mark Gu, James Kaplan , Michael Liebow, Raghav Sharma, Kate Smaje , and Steve Van Kuiken
• “ Unlocking value: Four lessons in cloud sourcing and consumption ,” November 2, 2020, Abhi Bhatnagar , Will Forrest , Naufal Khan , and Abdallah Salami
• “ Three actions CEOs can take to get value from cloud computing ,” July 21, 2020, Chhavi Arora , Tanguy Catlin , Will Forrest , James Kaplan , and Lars Vinter

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Sky-high innovation: unveiling the future of cloud computing in industry 4.0.

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Nicola Sfondrini - Partner Digital and Cloud Strategy at PWC .

Industry 4.0, or the Fourth Industrial Revolution, introduces automation and data exchange in manufacturing technologies. This includes advancements such as smart integrated systems, the Internet of Things (IoT) and cloud computing.

These technologies allow for the interconnection of smart devices in industrial settings, supporting two-way, real-time communication in smart production environments. By connecting people, devices and industrial systems, cloud computing promotes data exchange and leverages advanced technologies to strengthen the ability to design, monitor and manage innovative, highly adaptable, automated and self-optimizing production processes.

Given the large amount of data involved in real-time automation and control, cloud computing is a key component enabling the operational economy. Cloud computing offers on-demand network access to a shared pool of configurable computing resources, which can be rapidly deployed and released, providing flexibility and scalability in the management of such huge datasets, thus allowing companies to extract knowledge from raw data and respond more quickly and effectively to market requirements.

Emerging Trends In Cloud Computing

This discussion will center on three pivotal trends that are currently reshaping the industrial landscape in the digital age, as part of the evolving cloud computing paradigm.

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• Edge Computing: Designed to process data near or at its point of generation, this approach can help to cut latency and reduce bandwidth requirements. For example, automotive factory assembly lines can use edge computing to conduct and process activities in real time on the plant floor without having to send large volumes of data to distant data centers. This can be critical for scenarios requiring real-time observability, such as predictive maintenance and automated quality control that call for instantaneous adjustments or actions.

• Integration With Artificial Intelligence And Machine Learning: Traditional cloud environments can be integrated with artificial intelligence (AI) and machine learning (ML) algorithms, so that they employ next-gen computational power to, for example, carry out sophisticated automated measurements for their overall operation.

AI algorithms not only track system behaviors and system failures but also use huge volumes of cloud data to sift for possible optimization, thus minimizing costs and carrying out proactive prevention. ML, on the other hand, learns from new data to become more efficient, possibly changing the course of process optimization and innovation.

• Quantum Cloud Computing: Still in its infancy, I believe quantum cloud computing will allow for unimaginable speed-ups to complex operating setups with large numbers of variables, surpassing what can be achieved using classical computing. For example, it would allow us to better understand the increasingly exotic states of particles, such as the electron, or allow us to solve complex logistical problems.

The beginnings of this technology are starting to emerge, with various new companies working on extending processing capabilities via the cloud (such processing is sometimes now performed in quantum hardware, kept cold enough to maintain its subatomic properties until the algorithmic tasks are completed). This technology might, in the future, enable the simulation of material properties at millions of scales, radically changing the nature of manufacturing.

Case Studies: Success Stories Of Cloud Integration

Germany is out in front of Industry 4.0 technologies, with many examples of cloud integration.

• Bosch Rexroth ActiveCockpit: This interactive communication platform represents good real-time data processing in a manufacturing setting. The ActiveCockpit collects, processes and displays production shop floor data in real time. With this system, production is operationalized more effectively.

All the critical manufacturing control variables are viewable at the manufacturing facility in an easy-to-understand manner to facilitate informed decision-making. It improves process efficiency, quickly diagnoses and remedies problems with production inefficiencies and maintains efficient machine operation. Cloud connectivity prevents downtime and conserves labor hours through predictive maintenance.

• Siemens Insights Hub: Siemens has created Insights Hub (previously MindSphere), an open cloud-based IoT operating system that connects analog infrastructure to the digital world via high-speed sensor technology. Insights Hub is particularly good at aggregating, processing, analyzing, visualizing and managing data.

Such IoT devices generate massive amounts of complex data from humble infrastructure that is hidden underneath, which the Hub can use to refine its own processes and develop new services (for example, in predictive maintenance, energy data management and so on). This system underpins Siemens' state-of-the-art Amberg plant in Germany, which is a leading automated and digitized factory globally.

Future Projections And Challenges

Cloud computing is set to lead the way to Industry 4.0. Innovations such as the distributed cloud, which merges cloud and telecommunications approaches, and the multi-access edge computing (MEC) market, which delivers services closer to the data source, will further enhance the transformative potential of cloud computing. As these innovations continue to emerge, the impact of cloud computing will only increase.

Yet, these new technologies bring new vulnerabilities, too, especially in terms of cybersecurity and data privacy. As manufacturing becomes increasingly digitized (via virtualized cloud-based platforms), the exposure to both cyberattacks and data breaches increases. Cloud-based technologies designed to strengthen critical infrastructure must also comply with increasingly stringent data protection regulation, which varies across legal jurisdictions.

The existence of these hurdles makes it easier to understand why cloud computing takes center stage in the digitalization process of Industry 4.0. As I said earlier, if any technology had the unique capacity to increase connectivity levels, process data in a smart way and analyze processes in an efficient and effective manner, that technology would be the cloud.

For these reasons and more, the adoption of cloud technology will bring numerous upgrades to the manufacturing industry over the next few years, opening up new opportunities for business models and value creation.

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Amazon Maintains Cloud Lead as Microsoft Edges Closer

Cloud infrastructure market.

Having established itself as an early leader in the market for cloud infrastructure, Amazon Web Services (AWS), the online retailer’s profitable cloud platform, is still ahead of the pack. According to estimates from Synergy Research Group , Amazon’s market share in the worldwide cloud infrastructure market amounted to 31 percent in the first quarter of 2024, down from 32 percent a year earlier. Meanwhile, Amazon's main rival Microsoft slowly edges closer, growing the market share of its Azure platform to an all-time high of 25 percent in Q1 2024. Combined with Google at 11 percent market share, the "Big Three" now account for two thirds of the ever-growing cloud market, with the rest of the competition stuck in the low single digits.

In Q1 2024, global cloud infrastructure service spending grew $13.5 billion or 21 percent compared to the first quarter of 2023, bringing total spending to over $76 billion for the three months ended March 31. Looking at the full year, the market is now at a $300-billion revenue run rate, explaining why the it is so fiercely contested. Despite its size, the cloud market is still growing strongly, with year-over-year growth even re-accelerating for the second consecutive quarter.

"In terms of annualized run rate we now have a $300-billion market which is growing at 21 percent per year," John Dinsdale, chief analyst at Synergy Research Group said. "We will not return to the growth rates seen prior to 2022, as the market has become too massive to grow that rapidly, but we will see the market continue to expand substantially. We are forecasting that it will double in size over the next four years."

Description

This chart shows worldwide market share of leading cloud infrastructure service providers in Q1 2024.

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Broadcom ends easy elasticity for VMware Cloud on AWS

Amazon is not taking this lying down, as shown by aggressive migration promotions.

VMware by Broadcom has made another change to its licenses – this time by disallowing on-demand use of its software in VMware Cloud on AWS.

In an email sent to customers late last week, VMware by Broadcom stated: "To continue delivering you the best possible experience, we are moving to a subscription-only model for the purchase and consumption of hosts, meaning we are no longer supporting the on-demand model."

VMware Cloud on AWS was the virty giant's first and flagship hyperscale partnership as it was jointly engineered with AWS. As is the case with most cloudy services, it was elastic – if users needed extra capacity, they could summon new hosts in as little as two hours and dispense with them later. Pre-acquisition VMware also sold the service on one and three-year subscriptions.

The new arrangement means it's still possible to spin up new resources, but only with a one-year subscription. Self-service for new hosts has also been canned. A reseller or Broadcom must be involved.

Customers currently using the on-demand model have been told they must purchase an additional one-year subscription for those hosts by August 1.

Elasticity is a key benefit of cloud computing because it allows customers to use and pay for resources for short periods – even a few hours. That's vastly harder to do with on-prem kit, as wheeling in a server to cope with a busy morning is beyond most organizations. Self-service is also a huge element of both public and private cloud computing.

It's therefore hard to see how this delivers "the best possible experience" as VMware by Broadcom's email styles the change – especially as VMware services from Microsoft and Google both offer on-demand services that AWS now cannot.

The licensing change follows the early May decision by Broadcom to end AWS's right to resell VMware Cloud on AWS.

• Broadcom's VMware strategy looks ever more shaky – and less relevant

VMware by Broadcom has a licensing portability win with Microsoft

• It looks a lot like VMware just lost a 24,000-VM customer
• CIO who dropped VMware 18 months ago now feeling thoroughly chuffed

AWS is not taking this lying down.

The Register recently received an invitation to an AWS event where the cloudy concern will discuss its migration services for VMware infrastructure.

"The recent changes to VMware licensing have raised concerns among many IT leaders, leaving some wondering if VMware is the right platform for their future workloads," the invitation opens.

AWS also partnered with CloudBolt Software on a survey of VMware customers across North America. The resulting "CloudBolt Industry Insights Reality Report: VMware Acquisition Aftermath" found 30 percent of those surveyed are "extremely concerned" about the potential impact of Broadcom's acquisition of VMware on their business, while 46 percent are "very concerned."

73 percent of respondents expect VMware prices to rise by 100 percent or more. VMware by Broadcom insists its price changes are misunderstood and that the list price of its products have fallen.

Most respondents to this survey are yet to decide what to do with their VMware estate and won't for months because the majority have seven to 24 months before their current license expires.

The study also says there is no mass exodus of VMware users, most of whom intend to keep some of their estate or continue as they do now – while also trying to reduce risk.

And risks clearly exist for VMware Cloud on AWS customers who will soon be without functionality most users take for granted. ®

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