AWS has a current annual run rate of $85 billion, according to Amazon CEO Andy Jassey, writing in a 5,000-word letter to shareholders on April 13. The company recently decided to eliminate 27,000 corporate jobs (seemingly about 9% of it), in an expectation of a general economic slowdown this year, even as overall revenues exceeded $500 billion in 2022.

Its current stock price has gone up this year, bringing its market cap back to more than $1 trillion; the company has more than 1.5 million total employees.

Against that backdrop, Jassy noted in his letter that he wants corporate employees to return to the office, writing “we’ve become convinced that collaborating and inventing is easier and more effective when we’re working together and learning from one another in person.

"The energy and riffing on one another’s ideas happen more freely, and many of the best Amazon inventions have had their breakthrough moments from people staying behind after a meeting and working through ideas on a whiteboard, or continuing the conversation on the walk back from a meeting, or just popping by a teammate’s office later that day with another thought.”

It's Still Early Days
One can surmise that a need for continued innovation with its AWS services is part of the push to return to the office, as Jassy sees “short-term headwinds as companies are being more cautious in spending given the challenging, current macroeconomic conditions.

"While some companies might obsess over how they could extract as much money from customers as possible in these tight times, it’s neither what customers want nor best for customers in the long term, so we’re taking a different tack.”

Jassy claims AWS “is still early in its adoption curve,” and it of course faces unceasing competition from Azure and the threat of Google Cloud some day reaching more of its potential.

Jassy writes in his letter that “many AWS customers tell us that they’re not cost-cutting as much as cost-optimizing,” and that AWS is finding “an increasing number of enterprises opting out of managing their own infrastructure, and preferring to move to AWS.” He also mentions that Amazon is “investing heavily in Large Language Models (LLMs) and Generative AI,” the fruits of which “will transform and improve virtually every customer experience,” he writes.

Time to Address the Other 90%
In his conclusion, Jassy says that despite the growth of AWS, “90% of Global IT spending still on-premises and yet to migrate to the cloud,” which is in line with other industry estimates. Gartner, for example, has projected enterprise IT spending on data centers, software, and services at around $2.3 trillion in 2023. Amazon's $85 billion controls about one-third of public-cloud spending. Thus estimated total cloud revenues of around $255 billion represents slightly more than 10% of enterprise IT spend.

The IDCA Smart Nations EESG Digital Readiness Index of Nations tracks how tech development affects socioeconomic progress in 147 nations across the world, finding extreme disparities in key areas such as Internet access and speed, and especially data center development.

To bring the developing world's Digital Infrastructure up to a substantial fraction of that found in the developed world will require the creation of more than 100 million new IT jobs, in all areas from software development to data center management. Jassy and the rest of AWS managers would no doubt agree that the world itself is still early in the adoption curve of the cloud computing and related infrastructure that can propel it upward.

Photo of Andy Jassy by Amazon.