Amazon is trying to reach larger businesses that want to store some of their technology functions in the cloud while keeping tighter control of others.

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Amazon will let customers put servers used in the company’s cloud-computing data centers into their own facilities, an effort to reach businesses that want to store some of their technology functions in the cloud while keeping tighter control of others.

The move, announced Wednesday by Amazon Web Services (AWS) Chief Executive Officer Andy Jassy at Amazon’s re:Invent conference in Las Vegas, helps provide hybrid-cloud strategies desired by many larger enterprise customers in an area where cloud-competitor Microsoft is making headway.

Amazon’s announcement represents a continued shift for the Seattle-based company, which once preached the mantra of moving everything to the public cloud, and is a boon to VMware, majority owned by Dell Technologies, which is looking for ways to keep growing. The AWS hardware put into customer data centers as part of this offering will have VMware software on it. Both companies will sell the new product and share revenue, said VMware CEO Pat Gelsinger.

“It’s a pretty big statement to the industry at large — now Amazon is going to become an on-premise hardware vendor,” Gelsinger said.

AWS announced a slew of other new or updated offerings at its cloud-computing conference in Las Vegas, seeking to maintain its lead in the market for internet-based computing.

• Glacier Deep Archive is a data-storage service coming in 2019 that is about a fourth of the cost of Amazon’s current storage pricing, Jassy said.

• Amazon FSx for Windows File Server is a Windows-compatible service that may help Amazon win cloud-computing customers who might otherwise shift to Microsoft’s Azure.

• New services for machine learning, a powerful type of artificial intelligence software. AWS announced Inferentia, its first chip for drawing inferences from data, which will go on sale next year.

• The company also unveiled a service to make it faster and cheaper to use machine learning algorithms in Amazon’s cloud.

• Amazon Managed Blockchain, a new service that can be used to manage peer-to-peer payments, process loans and help businesses transact with distributors and suppliers.

Amazon uses the annual re:Invent conference to highlight new tools and features, seeking to stay ahead of cloud rivals Microsoft and Alphabet’s Google. The global public cloud market will grow to $278 billion in 2021, up from $176 billion this year, according to Gartner.

AWS sales will reach $71 billion in 2022, which would give the division a valuation of about $350 billion, according to Jefferies analyst Brent Thill.

Facial recognition software defended

Amazon’s cloud chief defended the use of controversial facial recognition software and said the company is educating government officials about the service and how the technology might be regulated.

Amazon Web Services CEO Andy Jassy addressed criticism that its Rekognition service, which can identify people from photos and video, threatens civil liberties if it is used by law enforcement.

“Even though we haven’t had a reported abuse case, we’re very aware people will be able to do things with these services that could do harm,” Jassy said to reporters at the company’s annual re:Invent conference in Las Vegas.

The software can be used at lower confidence levels for tasks such as identifying celebrities in video footage, Jassy said. But the confidence levels should be set higher when used by law enforcement and should only be a tool, not the sole factor used in making a decision, he said.

Machine learning software can be dialed up or down, depending on how accurate users want the results to be. Higher confidence levels are set when more accuracy is needed.

The American Civil Liberties Union in May blasted Amazon for marketing the service to law enforcement agencies. Another civil rights group, the Project on Government Oversight, criticized the company in October for offering the software to U.S. Immigration and Customs Enforcement.