Thursday, May 23, 2024

Jeff Bezos Declares Amazon Web Services to be a Home Run

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For much of its 10 year history, the financial numbers behind Amazon’s Web Services (AWS), the defining web service of the cloud era, have been shrouded in secrecy. That changed in April 2015, when for the first time Amazon publicly disclosedits cloud earnings. Ever since the stratospheric growth of AWS has continued to accelerate.

In a letter to Amazon shareholders, Jeff Bezos, founder and CEO of Amazon, wrote that in 2016, AWS is reaching $10 billion in annual sales, which is a pace even faster than that which Amazon achieved that milestone.

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“Luck plays an outsized role in every endeavor, and I can assure you we’ve had a bountiful supply,” Bezos said.

Luck alone, however, isn’t what has powered AWS and the cloud to become a $10 billion a year phenomena. Bezos emphasized that Amazon’s culture, which is focused on obsessiveness around customers and a continued desire to invent and re-invent itself time and again are key ingredients of AWS’s success.

“Just over 10 years ago, AWS started in the U.S. with its first major service, a simple storage service,” Bezos wore. “Today, AWS offers more than 70 services for compute, storage, databases, analytics, mobile, Internet of Things, and enterprise applications.”

Growing from a single data center, AWS now has 33 Availability Zones across 12 geographic regions worldwide and is used by companies large and small.

“AWS is bigger than was at 10 years old, growing at a faster rate, and – most noteworthy in my view – the pace of innovation continues to accelerate – we announced 722 significant new features and services in 2015, a 40 percent increase over 2014,” Bezos wrote.

While Bezos noted that, in the early days, there were many who questioned the value of Amazon moving beyond its core business of selling books. He noted that he’s glad he didn’t listen to the critics.

“Whether you are a startup founded yesterday or a business that has been around for 140 years, the cloud is providing all of us with unbelievable opportunities to reinvent our businesses, add new customer experiences, redeploy capital to fuel growth, increase security, and do all of this so much faster than before,” Bezos wrote.

Among the many customers of AWS is Major League Baseball, which began its 2016 baseball season this week. Appropriately, Bezos provided a baseball analogy for the success that AWS has seen to date: “We all know that if you swing for the fences, you’re going to strike out a lot, but you’re also going to hit some home runs,” Bezos wrote.

He noted that in baseball there is a restriction – a home run can only score a maximum of four run. In business, there is no such four-run limit.

“In business, every once in a while, when you step up to the plate, you can score 1,000 runs,” Bezos said. “This long-tailed distribution of returns is why it’s important to be bold. Big winners pay for so many experiments.”

Sean Michael Kerner is a senior editor at Datamation and Follow him on Twitter @TechJournalist

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