Heath Brownsworth

Last week Amazon Web Services (AWS) held its first ever user conference, AWS re: Invent, at The Venetian Las Vegas with 6000+ plus customers, partners and vendors in attendance.  Senior Vice President Andy Jassy, head of AWS, explained that the name re: Invent was chosen for the conference to reflect the two predominate types of AWS customer, companies inventing their business in the cloud and companies reinventing their business and moving to the cloud.  Regardless of which camp people fell in, there was no shortage of enthusiasm for all things cloud.

As you would expect there were a number of product and program announcements, the two most significant being an approximate 25% cost reduction for the Amazon Web Services Simple Storage (S3) solution and Amazon’s entry into the data warehouse space with its introduction of Amazon Redshift.  Both announcements were met with applause and affirm Amazon’s commitment to passing the benefits derived from cloud computing’s economies of scale along to customers, which not coincidently was one of the main themes of the conference. Jassy took this opportunity to highlight how the AWS virtuous cycle of attracting customers, investing in capital, investing in technology, and improving efficiency has led to over 20 price reductions since AWS first began.

In addition to the financial benefits of cloud computing, AWS also focused on two other major themes – the cloud is for production workloads and pace of innovation as a competitive advantage.  One of the knocks commonly sited against AWS is that the cloud is not suitable for production. AWS utilized keynotes, sessions and their resources on the show floor to debunk this notion. During his opening keynote, Jassy cited the following reasons why cloud makes sense for all workloads:

• trade capital expense for variable expense
• lower variable expense than companies can do themselves
• you don’t need to guess your capacity
• dramatically increase speed and agility
• stop spending money on undifferentiated heavy lifting
• go global in minutes

For those still with doubts, Jassy layed out the high margin business model of technology’s ‘old gaurd’ and contrasted it with Amazon’s low margin / high volume business philosophy.  The implication from AWS being that it is no longer question of ‘if’ production can be moved to the cloud, but ‘when’ it should be moved.

Last but not least, was the focus on ‘pace’ of innovation.  Innovation is often an overutilzied term these days, but AWS effectively utlized the Re:Invent conference to showcase that it is the pace of innovation afforded by the cloud that makes the differnce.  In thier own business, AWS is on track to deliver over 150 new products or significant feature enhancmenets in 2012, that is about 1 every 2.5 days, which for anybody familar with the high tech / software industries is simply staggering.

For customers, AWS talked about frequency of expermentation, cost of failure, amount of innovation possible on-premise vs. in the cloud.  Jeff Bezos, CEO of Amazon.com, discussed the importance of the this concept in his fireside chat with Amazon.com CTO Werner Vogels quipping that it is easy to invent things customers don’t want, that the real trick is to invent things they do want. The thrust of Bezos’s agrument being that the low cost of the cloud allows you many more opportunities to experiment and thus increases your chances of iventing soemthing customers actually want.

Whether you attended AWS re:Invent to better understand the cloud’s economies of scale, or to learn how to run production workloads in the cloud, or to build modern solutions that improve your business agility, the message from AWS, and validated by all present, was clear – full speed ahead to the cloud.

Heath-