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Saturation worries won't slow AWS growth rate

AWS releases and improves its cloud services at a dizzying pace. But which approach will keep it on top with enterprise IT -- new offerings or polishing its current portfolio?

AWS has the largest number of public cloud services available in the market, making it a one-stop shop for public cloud. Research predicts that AWS' growth rate will continue to rise in the coming years, but it's unsure whether it will get there by releasing more services or via enterprise adoption of its current services.

It's likely that AWS does both, given the constraints it will face for the next five or so years. Eventually, the market will hit a saturation point, and the number of services that AWS releases will have a diminishing return. Enterprise IT has a capacity for what it can use and, while the current services may even be more numerous than enterprise IT needs, it's not likely that doubling those services in the next few years will keep the AWS growth rate high.

The cloud provider continues to release services fast and furiously, with some, like AWS IoT, catching on. However, a few, such as desktop file sharing, have not. AWS fires up the two-pizza teams, builds services that it thinks the market will need and then it waits to see what sticks. If nothing sticks, it will slow down new service releases.

It may not make sense to continue to build new services because of the constraint of saturation, so AWS likely will focus on improving existing core services, such as Elastic Compute Cloud and Simple Storage Service, as well as niche services, such as AWS IoT and analytics.

The market will favor this approach, given that enterprises have spent years binding their systems to AWS. Moreover, it could be the path to improved revenue and a continued AWS growth rate; it's easier to work on existing services than risk building something new.

Overall, AWS will continue to release new services at a steady pace for the next few years. However, at some point -- perhaps 2020 -- the public cloud giant will saturate the market with sellable services, and will redirect resources into improving existing services, putting extra emphasis on the bestsellers. In the end, the high AWS growth rate will continue and the provider will further frustrate its public cloud market competitors.

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This was last published in February 2017

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