AWS re:Invent 2024 — What Enterprises Should Know about the Next Frontier of Cloud Computing

When AWS CEO Matt Garman and his executive team took the stage to lay out plans for the upcoming years, they zeroed in on innovations around compute storage and AI to empower the next generation of cloud capabilities.  

Here are the highlights:  

• AI workloads: AWS executives emphasized security, performance and affordability for enterprise-scale AI workloads.

• AWS Graviton4: The newest generation of AWS’ custom silicon will deliver higher performance and unmatched energy efficiency with full encryption.

• Trainium2 chips: These are purpose-built AI training chips promising a powerful and cost-effective solution for large-scale model training.

• Sovereignty focus: AWS continues to double down its investments in offering sovereign cloud infrastructure services, and announced the AWS Digital Sovereignty Competency program to help enterprises maintain authority over their digital assets, ensure data residency, access control, resilience and self-sufficiency.

• Sustainability commitment: AWS unveiled new energy-efficient data center components tailored for AI workloads. These advancements in power, cooling and hardware are aimed at supporting future AI innovations and enhance overall efficiency across AWS' global infrastructure.

• IoT and edge computing: Considering industrial data is often locked in on-premises systems, AWS is expecting to make advances in over 40 billion connected IoT devices by 2025, generating an estimated 175 zettabytes of data.

• Investing in startups: AWS reaffirmed its commitment to startup success with a $1 billion credit fund to help emerging companies scale faster.

• Security as the top priority: From data centers and chip design to the virtualization stack, AWS showcased its Secure by Design philosophy, from which it weaves security into every layer of the cloud.

• Project Kuiper: This is Amazon’s plan to offer low-latency satellite internet. It aims to provide more than one Gbps speed and revolutionize use cases such as pipeline monitoring, bushfire detection and machine learning at the edge.

• Quantum computing:  AWS plans to make quantum computing accessible for research audience through its Amazon Bracket program. It would give access to those who want to explore what quantum computing is capable of, in fields such as logistics, agriculture, finance and pharma; broad commercial viability is still possibly a decade away.

• AI at Amazon: Amazon CEO Andy Jassy discussed how AI is revolutionizing almost every aspect of Amazon’s operations, from seller onboarding and search enhancements to advanced robotics in fulfillment centers. His presence made a solid impression, showcasing that Amazon is taking its own medicine.  

ISG’s Analysis of the Event: 7 Takeaways 

1. GenAI and LLM integration in Amazon Bedrock present both more flexibility and more complexity: AWS has doubled down on AI and LLMs in its Amazon Bedrock AI platform, which helps align the company with a market where competitors such as Google, Microsoft and Oracle have established a strong foothold. AWS focuses on offering choice to users, and not only offers one-size-fits-all but expands the roster of pretrained and customizable LLMs, giving customers far more flexibility. This is a strategic move that attempts to level the AI playing field, potentially leapfrogging competitors by granting customers the freedom to pick and tailor models for their specific contexts — something AWS peers still struggle to match. We believe users will benefit from this broadened selection, and partners can position themselves more confidently with various models and industry-specific scenarios at their disposal. The drawback lies in the integration complexity and internal expertise required to effectively leverage these options.

2. Infrastructure services are optimized for cost efficiency: AWS’ introduction of next-generation Graviton and Trainium chips, as well as improved storage and networking capabilities, are a testament to the company’s continued efforts to blend performance with affordability. While price pressure is a market-wide reality, AWS’ approach suggests it is aiming to offer customers improved value without compromising capabilities. While users and partners can now better balance costs and innovation, they will face familiar challenges in migrating legacy workloads and rearchitecting so that they can fully exploit these enhanced services. 

3. Vertical industry solutions and preconfigured use cases: AWS offers prebuilt templates and sector-specific solution frameworks that aim to shorten the time to value and reduce complexity. They also aim to remove much of the initial guesswork for customers in sectors such as healthcare, finance and manufacturing. AWS partners can use these accelerators to enter new markets faster. Enterprises that use this strategy will experience tighter coupling with the AWS platform and nudge them deeper into the AWS ecosystem — a trade-off between convenience and vendor lock-in they should be aware of. 

4. Security, governance and multicloud observability come at a price: AWS has enhanced its compliance, monitoring and data governance tools to address the complexity of modern IT environments and acknowledge the reality of hybrid and multicloud deployments. Users gain more coherent control over distributed infrastructures, while service providers can propose more holistic managed services. Enterprises should note that AWS’ expanded toolset encourages reliance on its ecosystem for visibility and governance, reinforcing a degree of lock-in that companies must weigh against the promise of increased control. 

5. Customers find richness of solutions and incremental updates helpful: Beyond the headline-generating features, AWS’ incremental product enhancements — often under the hood — can help its customers and their service providers derive tangible value. These subtle improvements streamline integrations and performance, so organizations can create a more coherent, end-to-end solution stack. We’ve found that, while incremental updates might lack immediate buzz, they can significantly reduce complexity, encourage ecosystem growth and foster an environment that allows enterprise customers to experiment and innovate more quickly. 

6. AWS users are connecting the dots for their benefit: AWS tooling and expanded service portfolio allow its customers and their providers to interlink various AWS offerings, creating richer data ecosystems. AWS claims that the outcomes are enhanced data insights, more sophisticated analytics and, ultimately, sharper competitive advantages. AWS partners are finding this helps differentiate their managed services and specialized solutions. We find these incremental improvements are, in fact, strengthening the core foundation of AWS’ services.

7. There is evidence of enhanced search and unified experiences: By bolstering search capabilities and breaking down product silos signal that AWS intends to offer a more unified cloud environment. Enterprises will benefit from easier navigation, quicker access to relevant services and the ability to rapidly identify and leverage emerging innovations. This seamless discoverability is not just a convenience feature but a catalyst for project starts, problem resolution and closer alignment with strategic goals. AWS partners, can guide their customers more efficiently, positioning AWS as an integrated solution rather than a patchwork of disconnected components.  

AWS Customer Case Studies 

Several large name clients as well as small startups were called in to showcase how they are leveraging and benefiting by using AWS offerings.  

• Merck demonstrated significant cost savings and improved agility by retiring legacy systems and modernizing applications on AWS.

• Capital One highlighted its FinOps practices and the use of AWS to drive AI initiatives. Sprinklr spoke about how it is leveraging AWS Graviton and C7G instances for significant cost and performance improvements in AI workloads. 

• Monks emphasized the reliability and scalability of AWS for GenAI solutions, achieving significant cost savings and efficiency gains. 

• The Hartford in the U.S. and Novo Nordisk from Denmark showcased how GenAI is transforming their respective industries, from fraud detection to healthcare innovation. 

• Rocket Mortgage highlighted the speed and agility of GenAI development on AWS, having built over 100 custom apps using Amazon Bedrock in just a few months. 

• Itaú Unibanco, the largest bank in Latin America, announced it will complete full migration to the cloud by the end of 2028, an aggressive target for a bank that processes over 20 million daily transactions.