AWS saw its maximum success in the last few years with the start-up wave, apart from the enterprise and the SMBs, which are buying into its public cloud strategies. In 2018, will there be a different way of positioning yourselves?
We would like to view our focus areas as three blocks. Firstly, the start-up internet space is something we’re going to continue to invest in, including the SMB space. According to a report by YourStory on the top 100 start-ups, over 90% of those on that list are AWS customers. So, that’s a piece we have been well aligned with, globally as well as in India.
Our close involvement with the internet world with companies such as Airbnb, Expedia, Pinterest, Dropcam and Netflix – who built businesses which are disrupting the enterprise – gives us a ring-side view and drive the idea of building ‘digital factories of innovation’.
Secondly, the brick-and-mortar enterprises. Over the last couple of years, those conversations and our investments in that space have really accelerated. Every significant vertical, every significant workload that you can talk about is now running on AWS.
Thirdly, we are looking at retiring technical debt. Over the last so many decades, these large companies have invested in IT infrastructure. Most of it is being sub-optimally used. The conversations these days are around transformation, mitigation and mass migration.
AWS Focus Blocks:
Gartner recognizes you as an undisputed leader in cloud infrastructure and services, but the gap is clearly closing. What are the value differentiators you bring into customer conversations?
There are two kinds of companies that exist: the first kind being the customer-obsessed companies, the second being the comparison-obsessed companies. And there’s nothing wrong in either model.
We have millions of active customers with virtually every use case that you can think of on AWS, across industries, start-ups, SMB companies, whatever you could talk about.
I think the critical part is in how we view our customers. At AWS, we believe that a customer conversation is incomplete if we do not discuss innovation. We believe we help CIOs drive their innovation journey better.
We have a very transparent price mechanism. There are no contracts that you sign that lock you in. All other vendors talk about ‘pay as you go’, which we pioneered years ago. Everybody is trying to build an AWS equivalent.
The other thing about pricing is that we’ve lowered our pricing 62 times in the last 12 years that we’ve been around. It wasn’t done because we had competition – it was done because that’s our model, also known as the Amazon Flywheel.
In this model, you lower the price to get more customers coming, which is going to give you economy of scale which, in effect, is going to allow you to lower the price again. That’s how we base all our businesses at Amazon, not just at AWS.
We keep lowering the price, and we still run the business at an acceptable margin. If you take a look at our quarterly statement, we come in at some US$ 4.5 billion with a 42% year-on-year growth. Also, we listen to our customers and we build our roadmaps. We are looking to build a multi-generational business here.
“At AWS, we believe that a customer conversation is incomplete if we do not discuss innovation.”
Bikram Singh Bedi, India Head, Amazon Internet Services
How has the advent of local data centers over the last 24 months changed your conversations with customers?
We have 75,000 customers in this country who are using database as a platform. So, we’ve already had large numbers of customers using AWS and giving us feedback. Of course, the non-AWS users were giving us feedback as to how we should bring in these local data centers.
The feedback helped solve some application latency issues and regulatory concerns around data, where it lies and residency, to name a few. We very quickly got our compliance teams, our security teams to interact with the regulators to understand what is what and then we put it all together.
So, based on the guidelines from the regulatory body in the financial services sector around security, policies, etc. we have released a comprehensive white paper which states the AWS posture, specifically in the Indian context.
The resonating change is that cloud is the new normal. Yes, customers are more receptive to moving a number of workloads that were earlier not being looked at for cloud. From a service perspective, the cloud is any day better than setting up your own data centers.
Customers now strategize on which one goes first, in terms of applications. For example, the latest set of announcements for the services that we have launched gives customers the ability to run hybrid infrastructure.
So, if customers are running infrastructure which is virtualized with VMware, we give them the ability to use the same controls, the same devices, the same tools that they have been using and extend that onto AWS. It’s a great way to extend their applications beyond their current infrastructure into the enterprise.
Also, the Government of India has certified us to now take on a number of projects and workloads. We were already talking to a number of government organizations.
AWS has a rich ISV eco-system. How much more would it be aligned in investing towards them in 2018?
ISVs are a big focus area for us. We have an acceleration program where we are basically helping our ISVs to go to market. We are working very closely with Intuit, Adobe, SAP and Microsoft. In India we have Ramco, Mithi Software, Indusface, Nucleus, Finnacle, Murex, to name a few, and this will continue into the year.
“We are making it easier to use artificial intelligence, machine learning, deep learning or automatic speech recognition and NLP – the philosophy being: Take the API, plug it in.”
What would you say are the defining trends in the public cloud space which customers have already taken cognizance of, or should do so in 2018?
First, the idea of building factories of digital innovation – we believe that is going to be a big piece of how years 2018, 2019 and 2020 are going to unfold. Whether a bank, a manufacturing, retail or a distribution company, or a public sector enterprise, practically everyone is now looking at a digital interface for citizens. We are talking about digital health, digital education, agriculture and smart cities – the whole eco-system.
Customers are consolidating data and are talking of real-time analytics, log stream analytics through services like Amazon Kinesis, visualization at the front end through services like Amazon QuickSight, which allows you to seamlessly provide visualization vis-a-vis some really expensive tools out there in the market.
At Amazon, we have been using learning machines for more than 20 years in Prime Air, which is the delivery piece; in Amazon Go which is our new offline initiative, where you can walk in and pick up stuff and walk out, without having to check out or having to present a credit card. We will do all of that by figuring out who the customer is by leveraging artificial intelligence, machine learning and deep learning techniques.
We are now hardening our intelligence mechanisms as services, democratizing it and giving it to developers and companies. We are making it easier to use AI, machine learning, deep learning or automatic speech recognition and NLP – the philosophy being take the API, plug it in.
Policy Bazaar is a great example. They don’t run an IVR anymore – they now use a text-to-speech agent called Amazon Polly. With Shaadi.com, content moderation and facial analysis is done using AWS Rekognition.
We’ve made so many announcements around AR-VR. It’s all available as APIs, the cost of failure being zero. So, a customer’s ability to innovate is going to be massive because he is not scared of failing.
That’s what AWS allows you to do. Companies are starting to get educated on retiring technical debt. CDOs are asking those questions, so are the COOs, CFOs and the business alike. They want to be agile, they want to move quickly.
Importantly, the CIOs are at the nucleus of this transition. They are also moving forward. Some of this pressure is helping them to assert themselves and substantiate their case for moving to the cloud as a better posture from a security and agility perspective. I think that whole retiring technical debt conversation is also going to move fast.