Crisis-Stricken Amazon Pivots to Web3
The global downturn had dragged AWS to one of its lowest lows in years. In the fourth quarter of 2022, AWS’ revenue touched USD 21.4 billion, but the growth rate was slower compared to the 21.5% and 33% seen in the third and second quarters, respectively. It was definitely a worrying sign for the company. Amazon wants to extricate itself from the falling economy and is looking to leave no stone unturned to elevate AWS. The company has been slowly but surely manoeuvring its way into web3. In the first week of February, AWS announced the hiring of senior go-to-market web3 specialists for the “growing adoption of web3 workloads on AWS”. During Amazon’s earnings call, CEO Andy Jassy noted that the key to improving AWS earnings was to run their technology more efficiently while figuring out ways to ‘help customers spend less money’. He continued, “You see it with virtually every enterprise, and we’re being very thoughtful about streamlining our costs as well.” Blockchain on AWS Why is AWS hiring web3 specialists? The official website mentioned that AWS has built tools for blockchain companies that want to run “centralised ledger database that maintain an immutable and cryptographically verifiable record of transactions, or a multi-party, fully-managed blockchain network that helps eliminate intermediaries”. Amazon’s moves in the web3 space is already seeing pay back in the space with a quarter of all Ethereum nodes running on AWS servers. AWS is also enmeshed with blockchain in other ways – the website stated that a quarter of all Ethereum nodes run on AWS servers themselves. More efficiency for customers Amazon is presumably expecting blockchain to run AWS servers faster and with better security. The company has a blockchain-centric cloud service called Amazon Managed Blockchain which supports Ethereum and their enterprise solution Hyperledger Fabric. The service promises to do the heavy lifting while setting up blockchain networks by cutting down the time taken by 60%. Attracting developers The web3 openings may also be a tactic for the company to draw in developers who were earlier fleeing bigger tech companies for web3. During the pandemic-induced boom in blockchain, web3 and cryptocurrency, employees were seen quitting jobs from the likes of Microsoft, Google, Meta and Amazon, which were ‘perceived safe’, to move towards the greener pastures of web3. Also, to developers, it is of prime importance to stay at the front line of cutting technologies. In an interview with NewStack, the former VP of Deliver Experience at Amazon, Devraj Varadhan, spoke about why he quit his cushy job at the end of 2020 to join crypto company Ripple as their SVP of Engineering. “Crypto is one of the most exciting industries to be in right now,” he said. “It’s not just me, there are many people leaving the big tech giants and traditional finance to enter the space. Imagine joining Google or Amazon back in the nineties and having the opportunity to shape the internet into what it is today. That’s how I think about the crypto space today,” Varadhan added. Besides, the web3 startups usually offered perks that bigger companies didn’t, like remote work or flexible individualised schedules. Driving the company’s web3 ambitions will naturally lure back developers. The company also has a full web3 division called Web3 Labs which it explains will “provide insights, platform and developer tools to support your blockchain journey”. https://twitter.com/avalancheavax/status/1623718984594952192?s=20&t=N84qp4Z-gpQYKHK69eRnUg Increasing competition Amazon, however, is not the one to sit back waiting for competitors like Google and Microsoft or even nascent companies building web3. (In the end of last year, Google Cloud announced it was launching blockchain Node Engine which it called ‘a fully managed node-hosting for web3 development). Meanwhile, in mid-January, AWS also formed a partnership with Ava Labs, the company building Layer-1 blockchain Avalanche to push the adoption of blockchain across enterprises, institutions and governments. Emin Gun Sirer, CEO and founder of Ava described the deal as “a huge boon for both individual and enterprise developers to be able to spin up nodes and test networks on the fly with AWS in whatever legal jurisdiction makes the most sense for them”. A Blockworks report stated that Amazon is currently preparing to launch its own NFT marketplace. A lot of this can be attributed to the fact that satisfying customers is inherent to Amazon’s culture. In a 2017 letter that Bezos wrote to company shareholders, he said, “One thing I love about customers is that they are divinely discontent. Their expectations are never static – they go up.” And right now, web3 can pull in more AWS clients.
Amazon’s moves in the web3 space is already seeing pay back in the space with a quarter of all Ethereum nodes running on AWS servers
The global downturn had dragged AWS to one of its lowest lows in years. In the fourth quarter of 2022, AWS’ revenue touched USD 21.4 billion, but the growth rate was slower compared to the 21.5% and 33% seen in the third and second quarters, respectively. It was definitely a worrying sign for the company. 
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Poulomi is a Technology Journalist with Analytics India Magazine. Her fascination with tech and eagerness to dive into new areas led her to the dynamic world of AI and data analytics.