Will Amazon Figure it Out the Security Thing

It’s been a few days since Amazon reported Q3 2015 earnings, and the financial results for AWS were staggering. Amazon defines AWS as “compute, storage, database, and other AWS service offerings”. As we can see in the numbers below, AWS doubled quarterly revenue from 6/14 to 9/15, with some of that growth likely coming at the expense of incumbent technology product vendors.

One interesting takeaway is that even though Amazon is stealing market share away from the likes of HP, Oracle and EMC’s of the world in the area’s of compute, storage and database, they did not have the same success in the CDN industry. Why? Because CDNs are cloud companies, and some have been around longer than even Amazon. Furthermore, CDN startups simply out-innovate Amazon CloudFront when it comes to the feature-set.

In short, Akamai owns the business of cloud compute, cloud storage and database, but itself is owned in the CDN industry, which interestingly leaves one sector up for grabs – cloud security. In the cloud security space, no one single company dominates the market, not even Cisco. The security space is fragmented, with dozens and dozens of players offering a boatload of cool features.

Does Amazon pose a threat to the pure-play security industry? One thing is for sure, if Amazon were to figure it out this one specific thing, they would steal the low hanging in the security market, put a few companies out of business, and probably make a few hundred mil in annual revenue in the process. Will Amazon figure it out in the next six months? Maybe.

Amazon Earnings

  • 3/31/14 – $1.05B
  • 6/30/14 – $1.0B
  • 9/30/14 – $1.17B
  • 12/31/14 – $1.67B
  • 3/31/15 – $1.567B
  • 6/30/15 – $1.84B
  • 9/30/15 – $2.085B
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