Amazon Web Services, every mention

Amazon Web Services · Acquired Sep 6, 2022 · 100 mentions

• ▶ 18:23 Ben Gilbert How is Amazon supposed to serve their AWS customers if all of them are on excess capacity during Q four at all?
• ▶ 18:32 Ben Gilbert and I just took a dependency and all of my streaming is happening on AWS.
• ▶ 19:08 David Rosenthal The, at the time, AWS CTO, now CTO of all of Amazon, who wrote flat out in a Quora post in 20 11, quote, the excess capacity story is a myth.
• ▶ 19:23 David Rosenthal Actually, within two months after launch, AWS would have already burned through the excess amazon.com capacity.
• ▶ 19:31 David Rosenthal Amazon Web Services was always considered a business by itself with the expectation
• ▶ 20:41 David Rosenthal And, you know, I didn't even really realize before diving into this, the depth of innovation of what AWS was and what Amazon was doing and led them to it is so beyond anything else that was happening at the time.
• ▶ 21:36 David Rosenthal There is a similar sort of figure involved in inspiring the vision for AWS, and that is Tim O'Reilly.
• ▶ 28:08 David Rosenthal That is called Amazon Web Services.
• ▶ 28:32 David Rosenthal This is called Amazon Web Services, but it is not.
• ▶ 28:45 David Rosenthal Amazon Web Services lives within the Amazon Associates program, and that is run by a guy named Colin Breyer, which is very, very fun because Colin goes on to do many things, including recently
• ▶ 29:11 David Rosenthal But for now, in 2002, Colin technically becomes the first head of AWS.
• ▶ 29:18 Ben Gilbert And that was just within Amazon Associates at this point, because the whole point in this origin story, the scope of the ambition of AWS was to make available assets of Amazon.com to our affiliates, to Amazon Associates, who want to…
• ▶ 30:03 David Rosenthal But what I think is so important about number two, even though it leads to AWS, that is the creation of AWS, but not the AWS we know and love, but it's this idea of web two dot O
• ▶ 30:30 Ben Gilbert And I think people today have heard AWS so many times that they sort of forget that it's a little bit of a misnomer.
• ▶ 30:38 Ben Gilbert It's still called Amazon Web Services, but
• ▶ 30:41 Ben Gilbert The vast majority of what is happening when customers are paying the ludicrous amount of revenue to Amazon to access AWS is not web services.
• ▶ 31:50 David Rosenthal They've launched Amazon Web Services, Web two dot, oh, you know, blah, blah, blah.
• ▶ 33:22 David Rosenthal This is just so far until everything we think about with technology companies now and how things run, it's all thanks to AWS.
• ▶ 52:28 David Rosenthal They also are a technology company run on APIs because today, you know, fast forward, the legacy of everything AWS creates here is Stripe.
• ▶ 55:34 David Rosenthal Everything we just described so far in AWS origin story number three is related to software engineering and the amazon.com code base.
• ▶ 55:45 David Rosenthal But what AWS is, is abstracted hardware IT infrastructure and software too, but the core like S three EC two, that's IT infrastructure.
• ▶ 59:39 David Rosenthal Financial projections on there, so there's no financial projections in this document, and then he whiteboards them out on the spot in the meeting with the STM and the board where he's proposing this big grand vision to take over Amazon Web…
• ▶ 1:00:35 David Rosenthal Colin Breyer, who was running AWS until this point, Andy and Colin swap places.
• ▶ 1:00:42 David Rosenthal So Andy goes in, takes over AWS.
• ▶ 1:00:50 Ben Gilbert Andy right away took over the publishing of images via the Amazon Associates API, that sort of fledgling AWS.
• ▶ 1:01:41 David Rosenthal Adam, of course, would later leave AWS to become CEO of Tableau and is now back at AWS where he is now CEO of AWS.
• ▶ 1:02:12 David Rosenthal Do you know who else was in that first wave of external recruits who come in to join AWS?
• ▶ 1:02:27 David Rosenthal Which totally makes sense that Twilio would come out of AWS.
• ▶ 1:02:35 David Rosenthal He does take over AWS.
• ▶ 1:02:38 David Rosenthal Absolutely builds and leads AWS from what it was, which was very different into what it is today.
• ▶ 1:03:09 David Rosenthal They're talking about the origin of AWS.
• ▶ 1:04:57 David Rosenthal That's what AWS is today.
• ▶ 1:05:21 David Rosenthal So unlike myth number one about AWS origins, you couldn't just take excess amazon.com it capacity and externalize it.
• ▶ 1:06:47 David Rosenthal EC two is elastic compute cloud, which is the compute counterpart to the storage part of AWS in S three.
• ▶ 1:08:12 David Rosenthal So that's sort of the most obvious crack in the official narrative of the AWS origin, which brings us
• ▶ 1:08:19 David Rosenthal To the fourth origin story of AWS, the, uh, dissenting narrative, if you will.
• ▶ 1:10:42 David Rosenthal Yes, separately from the rest of AWS.
• ▶ 1:13:51 David Rosenthal The vision document proposing the AWS business and outlining the initial set of services for AWS, including our compute service EC two was finished and presented to the executive team in September, 2003.
• ▶ 1:15:07 David Rosenthal The official version now of the AWS history of it was all centrally planned.
• ▶ 1:16:51 David Rosenthal And I think that actually is also how AWS launched.
• ▶ 1:18:13 David Rosenthal So when S three launched, probably at the same time that you were playing around with it, a truly world-class, fantastic engineer at Microsoft at the time, by the name of James Hamilton, who's now an S team member and SVP distinguished…
• ▶ 1:19:41 Ben Gilbert So no joke, David, every month I get a bill from AWS for like 71 cents and I have no idea what old project it was for, but it's one of these things where it's like it's priced so dynamically.
• ▶ 1:20:02 Ben Gilbert But because it was an abandoned project for which I do not know what the email address to log into AWS is from whatever team I was working on, I kind of just don't care.
• ▶ 1:22:34 Ben Gilbert Themes for why AWS became successful.
• ▶ 1:22:50 Ben Gilbert But for startups who were building something from scratch, who could go on to become 50 plus billion dollar companies, my god, let's get them on AWS.
• ▶ 1:23:02 Ben Gilbert I mean, I remember the first time I met Dave Chappelle, who was doing developer evangelism for AWS early with Jeff Barr and so many other folks there.
• ▶ 1:23:10 Ben Gilbert It was just a breath of fresh air where every happy hour you went to, there were AWS people who were giving you tons of free credits, who were helping introduce you to other people for your startup.
• ▶ 1:23:28 Ben Gilbert Obvious default that you would build on AWS because it felt so ingrained with how you make startups is you start an AWS account for the thing that you're going to build.
• ▶ 1:24:14 David Rosenthal And then it was like, oh, well, you know, startups can run in AWS, but like real enterprises wouldn't do that.
• ▶ 1:24:24 David Rosenthal Non-differentiated, you know, non-mission critical stuff in AWS, but we're not going to put our mission critical stuff in AWS.
• ▶ 1:24:36 Ben Gilbert So I think there's this interesting, obvious first beachhead of customers that are startups, but when you think about the enterprise adoption and how eventually now, you know, your bank's application is on AWS and everything is moving to…
• ▶ 1:25:42 David Rosenthal Slide on this, where he talks about the six reasons AWS wins versus traditional infrastructure for enterprises, and it's exactly what you said.
• ▶ 1:25:59 David Rosenthal Two, you're getting lower OpEx than you could on your own thanks to AWS's economies of scale.
• ▶ 1:26:15 David Rosenthal AWS is elastic.
• ▶ 1:26:38 David Rosenthal You're instantly global on AWS versus when you run your own on-prem data centers, you're like wherever your data centers are.
• ▶ 1:28:51 David Rosenthal And then AWS shifted it to, okay, spend 70% of your time on software development and 30% of your time on worrying about our APIs and your infrastructure.
• ▶ 1:29:13 Ben Gilbert Now, AWS in its earliest days, let's call it the first couple years, was really startup focused.
• ▶ 1:29:45 Ben Gilbert So very quickly, AWS could serve these two markets of startups and the lift and shift enterprise.
• ▶ 1:32:03 Ben Gilbert Actually, we're going to use AWS instead.
• ▶ 1:32:05 David Rosenthal We're moving all of it to AWS, and I believe Netflix is still to this day, I think, 100% on AWS.
• ▶ 1:32:31 David Rosenthal Aren't you worried about being on AWS?
• ▶ 1:32:32 David Rosenthal And he's like, no, I'm not worried at all about being on AWS.
• ▶ 1:32:51 Ben Gilbert But the Netflix one, I mean, a lot of people were afraid to use AWS early on because they felt like they didn't want to do business with Amazon if they were a retailer, or they didn't want to do business with Amazon if they were in video,…
• ▶ 1:33:07 Ben Gilbert Matter of factly and so forcefully was him saying, you can trust that AWS is different than Amazon.
• ▶ 1:34:50 David Rosenthal Amazon targeted gross margins and operating margins for AWS in the 20 to 40% range.
• ▶ 1:37:05 Ben Gilbert And they start directly attacking Microsoft too, because I think Microsoft went from in the early days, someone where Amazon looked at them more as a partner, like we're happy to run Microsoft stuff on your AWS instances.
• ▶ 1:37:23 David Rosenthal Competitor to AWS by far.
• ▶ 1:39:47 Ben Gilbert And they just totally did not recognize the magical thing they had in front of them, which was all the customers and all the distribution who over the next five years would slowly dribble out and start their new stuff on AWS while…
• ▶ 1:44:10 David Rosenthal So I want to rewind back to Oracle and talk about something, but one thing that really came up in the research and from talking to people and friends at AWS and Amazon, Amazon and AWS deserve so much credit for overcoming one of the…
• ▶ 1:44:35 David Rosenthal And when AWS started, like we talked about the obvious core product market fit and first set of customers with startups.
• ▶ 1:45:04 Ben Gilbert Their first big contracts were with universities doing research and running effectively like their supercomputer loads on AWS.
• ▶ 1:45:54 David Rosenthal One of the things that I think to most people was to me before doing the research here is vastly underappreciated about AWS is, you know, people think about EC two and S three and it's like infrastructure as a service and compute storage…
• ▶ 1:46:19 David Rosenthal AWS services are the most used ones.
• ▶ 1:46:29 David Rosenthal AWS is a huge database business.
• ▶ 1:51:16 David Rosenthal And onto AWS products.
• ▶ 1:51:22 David Rosenthal 13 years after AWS launched.
• ▶ 1:52:01 David Rosenthal That's going to shift to AWS and B it's going to be so sticky, so sticky.
• ▶ 1:52:16 David Rosenthal AWS today is on an.
• ▶ 1:52:23 David Rosenthal That is not the most crazy, impressive, defensible thing about AWS.
• ▶ 1:52:28 David Rosenthal If you go look in the financials, in the 10 Q, the latest 10 Q from Amazon, they have to report the AWS revenue backlog.
• ▶ 1:53:34 Ben Gilbert Well, in 2014, Jeff Bezos wrote a memo, the annual memo that comes out to letter to shareholders, and said that quote, I believe that AWS is market size unconstrained.
• ▶ 1:53:48 Ben Gilbert That was the point at which it was a year before they broke out AWS's financials, and I think it was a six billion dollar run rate business.
• ▶ 1:53:59 David Rosenthal When the quote unquote AWS IPO, which I think Ben Thompson coined that term.
• ▶ 1:54:10 David Rosenthal At that point in time, AWS was a six billion dollar revenue run rate.
• ▶ 1:55:06 David Rosenthal And AWS is what powers the internet.
• ▶ 1:55:15 David Rosenthal AWS takes a tax on that, essentially.
• ▶ 1:55:36 David Rosenthal The AWS IPO happens in 2015.
• ▶ 1:55:40 David Rosenthal Six billion dollar revenue run rate for AWS.
• ▶ 1:56:25 David Rosenthal Andy Jassy was not technically the CEO of Amazon Web Services.
• ▶ 1:56:30 Ben Gilbert Senior Vice President of AWS.
• ▶ 1:56:42 David Rosenthal Jassy becomes CEO of AWS and Jeff Wilkie becomes CEO of everything else.
• ▶ 1:56:48 David Rosenthal That year, AWS does twelve billion dollars in revenue, over 50% of the company's operating profits, which as we said, they do every year.
• ▶ 1:57:38 David Rosenthal Adam Slipsky becomes CEO of Amazon Web Services.
• ▶ 1:58:03 David Rosenthal We've said it before, but AWS has about a 39% market share of the cloud.
• ▶ 1:59:35 Ben Gilbert AWS makes 90 plus percent gross margins on their bandwidth charges.
• ▶ 2:01:21 Ben Gilbert You're gonna run your ML on AWS.
• ▶ 2:01:57 David Rosenthal This has been an AWS love fest.
• ▶ 2:02:00 David Rosenthal We've heaped so much praise on them.
• ▶ 2:02:02 David Rosenthal It's like they've done everything right.
• ▶ 2:02:05 David Rosenthal There's one thing they missed.