Structure News: Does AWS set the pace for tech?

Where A Cloudy Forecast Is Welcome April 29, 2016 / by Tom Krazit This week, we'll talk about the surprising gap between security and tech pros, the continuing sentiment that AI is the future of computing, and the evolving nature of Amazon Web Services as a tech weathervane. STRUCTURE NEWS BRIDGING THE GAP BETWEEN INFOSEC AND TECH AT STRUCTURE SECURITY As we put together the agenda for Structure Security, scheduled for September 26th and 27th in San Francisco, I’ve been having so many great conversations about the present -- and future -- of security with our council of advisors. I’ve been surprised by how many of those folks have bemoaned the gap between information security professionals and technology professionals when it comes to product development, and explored that topic in a post this week. INDUSTRY NEWS U.S. CYBERATTACKS TARGET ISIS IN A NEW LINE OF COMBAT Cyberwarfare is going to be an interesting part of the 21st century. The New York Times confirmed this week that the National Security Agency has targeted ISIS networks with what one official called “cyberbombs,” hoping to learn enough about how ISIS communicates to impersonate its leaders and direct its troops into, presumably, drone-friendly areas. BOX AND DROPBOX VIE FOR MORE CREDIBILITY WITH BUSINESSES File-sharing companies Box and Dropbox will be forever compared because of the similarities in their names, products, and timing, and they’re both keen on breaking into big businesses, too. Fortune looks at product releases from both companies this week that they think will be attractive to business customers still skeptical about the benefits of cloud file storage. JEFF BEZOS, ASHTON KUTCHER, AND GEN. PETRAEUS BACK CRIMEFIGHTING TECH MARK43 Most local police departments around the country tend to be woefully behind when it comes to tech adoption, thanks to budget constraints and public wariness. But some big names are backing startup Mark43, which is building software that promises to be a state-of-the-art information-dashboard-of-sorts to police departments, according to New York Business Journal. INSIDE OPENAI, ELON MUSK’S WILD PLAN TO SET ARTIFICIAL INTELLIGENCE FREE We’ve been following OpenAI for a few months now, and Wired has a more detailed look at how the organization that promises to bring AI technology to the masses is faring. It released its first piece of software this week, and is managing to hold onto some world-class AI talent amid a market for AI talent that makes Bay Area real estate look tame. OPENSTACK: THE TELECOM’S CLOUD OF CHOICE The headline will strike some as a back-handed compliment, but ZDNet reports from the OpenStack Summit in Austin that telecom companies are turning to the software to build their own clouds. There are still more traditional IT users of OpenStack than in telecommunications, according to the report, but all the growth is coming from telecom companies. IN ANNUAL LETTER, SUNDAR PICHAI SAYS COMPUTING, AND GOOGLE, WILL BE DRIVEN BY ARTIFICIAL INTELLIGENCE Google is determined to make its work in artificial intelligence the selling point of its cloud challenge to Amazon Web Services (more on that in a bit), and it used this year’s annual letter to shareholders (which used to be called the Founders’ Letter until Alphabet came along) to reinforce that point. “We will move from mobile first to an AI first world,” Pichai wrote, and as Forbes noted, much of the letter focused on this AI-led future. BIG PICTURE If you were looking for a sign regarding the health of the tech industry from first-quarter earnings reports this week, you likely walked away confused. Apple reported earnings that weren’t a company record for that particular quarter for the first time in what seems like forever; Facebook destroyed its earnings estimates and chose the occasion to announce that founder Mark Zuckerberg is taking further control of the company; and Twitter, well, actually, nobody was surprised by Twitter’s earnings. I’m starting to wonder if a new tech bellwether is emerging in Amazon Web Services. Amazon reported Thursday that its cloud division recorded quarterly revenue of $2.57 billion, up 64 percent from last year, and operating income of $604 million, up almost threefold from last year’s $195 million, as reported by Techcrunch. To be fair, AWS earnings are probably more a measure of the health of the startup/venture capital world than the tech industry in general, which is so complex these days as to be influenced by many different global factors. But an amazing number of modern consumer web startups -- including several in the rarefied and suddenly dangerous “unicorn” group -- rely on AWS for their very existence. What happens when these high-growth no-profit startups start running out of money, which is keeping lots of folks in tech up nights in 2016? If the funding environment dries up, and these companies start folding or submitting to fire sales to larger tech players, AWS results could be a leading indicator of that strife. I doubt Amazon itself is that worried: as we discussed during Structure 2015, AWS revenue is coming from way more places these days than the Valley startup community. And 64-percent year-over-year growth would indicate that demand for AWS is still strong across the board, from multinationals dipping their toe in its clouds to massive web businesses like Netflix and Pinterest continuing to add users at a healthy clip, as Fortune notes. But the tech startup community remains the heart of its business. I’ll be watching Amazon’s second and third-quarter results for evidence of the startup winter.        DISCOVER MORE   Click here to unsubscribe from this list. Our mailing address is: Structure 405 El Camino Real, #215 Menlo Park, CA 94025 Add us to your address book Copyright (C) 2016 Structure All rights reserved. Forward this email to a friend. Update your profile.