Amazon Web Services (NASDAQ:AMZN) is charging ahead in the lucrative cloud market with the unveiling of a new service called AWS Outposts, which brings the hardware it uses to power its own cloud services to its customers’ data centers.
And according to a new note to investors from Oppenheimer analyst Ittai Kidron, the move illustrates the “importance and rising popularity” of hybrid cloud architectures.
Helped out by its partnership with VMware, beginning next year, AWS Outposts will pave the way for customers to use Amazon’s line of hardware configurations and software via their own servers that will “ultimately accelerate the transition to the cloud,” says Kidron.
“Outpost can expand AWS’s reach to private cloud use cases where latency and/or data governance sovereignty are important considerations,” writes Kidron.
The vendor VMware, which is providing software in the project, is poised to benefit since it’s a key partner. But for most other vendors such as Cisco, NetApp, HPE, Dell/EMC, Pure Storage, the news is “incrementally negative” and will rachet up pressure on these companies to invest more in multi-cloud capabilities, according to Kidron.
The introduction of Outposts does, however, crack the door open for partnerships with other cloud service providers as well as hardware vendors, given its “software-only” focus, concludes Kidron.
Amazon.com shares traded slightly higher to hit $1,684.36 in afternoon trade on Thursday.
Contact Ellen Kelleher at [email protected]