Andy Jassy’s Big Idea for AWS Expansion Marred by Glitches, High Prices

Amazon Web Services became a juggernaut by helping companies move their data and applications to the cloud—meaning data centers run by Amazon. But AWS has increasingly gone after another big business: providing software and hardware to power private data centers operated by customers that aren’t ready or may never be ready to move all their computing jobs to the AWS cloud.

So far, though, AWS’ attempt to stage a data center takeover has struggled. Software in the key product it developed for that purpose, Outposts, is prone to glitches, causing technical difficulties for some customers, according to two people with direct knowledge of the matter. The affected customers include videogame giant Riot Games, whose users have faced game-connection problems because of issues related to Outposts, one of these people said. The software failures and high financial costs of using Outposts have also put off some potential customers, according to current and former AWS employees as well as an AWS customer. As a result, Outposts was recently generating less than half a percent of AWS’ overall revenue.