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AWS acquisitions continue with focus to build on core services

Explore what AWS' recent IT purchases say about the cloud vendor's overall acquisition strategy and why it likes to make the smaller deals instead of any big splash.

AWS' acquisitions haven't focused on the big fish, but on technologies that should bolster the cloud vendor's existing offerings. 

AWS has made methodical, tactical moves over the past 18 months that should build to a sum greater than its parts. The cloud vendor hasn't added technology to sit on top of existing services or even replaced weak technology. Instead, it has augmented its core services.

Tech acquisitions often involve large sums of money, and most ultimately fail. When I advised companies on this subject in a former job, I came up with this approach to evaluate potential deals:

  1. Tactical acquisitions are better than strategic ones. An acquisition should augment offerings that already exist. It should add smaller, but meaningful services. A strategic purchase often comes with a large product unto itself, which means new customers and established revenue. However, a tactical acquisition rarely comes with such baggage and, therefore, is much cheaper and lower-risk.
  2. Look for something you can build upon. Because the technology you purchase has not been built for your requirements, you need to be able to modify it once it's in-house. If you can easily change an acquired technology to fit your company, this will increase the potential value of the acquisition. For example, a technology built on open source code will make integration with your own requirements easier and less expensive.

Let's consider some of the notable, more recent AWS acquisitions under this lens.

TSO Logic

Last December, AWS acquired TSO Logic, a cloud migration company in Vancouver, B.C. TSO Logic provides analytics that enable customers to look at the state of their current data center and effectively model a migration to the cloud.

From this data, TSO Logic derives a statistical model that determines spend patterns, including overprovisioned systems, and would thus benefit from the public cloud.

I'm sure this tool will soon be in the hands of the AWS sales engineers as they try to lure more customers to their cloud. It will enable AWS to provide detailed and fine-grained business cases down to the server level.   

Sqrrl

AWS purchased Sqrrl, a security startup in Cambridge, Mass., in early 2018. Its technology collects data from several data points, such as gateways, servers and routers, and then puts those findings inside of a security dashboard. The tool uses machine learning to determine any potential vulnerabilities, which enables IT security to take corrective action. 

While AWS has had strong cloud security, this tool augments those capabilities in a tactical and progressive way. The idea is to provide the AWS customer with the most up-to-date overall security package. In this case, AWS added the ability to apply proactive and intelligent cloud computing to its security.

CloudEndure

In January, AWS bought Israel-based CloudEndure, which focuses on workload migrations to the public cloud, disaster recovery and backup. This AWS acquisition should accelerate the movement of on-premises workloads into the AWS cloud. 

CloudEndure supports other name-brand clouds, as well, including Microsoft and Google, while AWS already has a suite of migration products. CloudEndure will clearly be an additive and not replace existing technology.

AWS plays it slow and steady

In the world of AWS' finances, these purchases won't even move the needle. However, AWS is perhaps playing the long game well. The right way to achieve cloud computing success is with well-thought-out baby steps, not risky and expensive leaps. 

This was last published in February 2019

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