We were honoured to have Werner Vogels, Amazon.com CTO, give a talk at HackFwd’s Build 0.7 event in Berlin on the how and the why of Amazon’s cloud business. In the talk, Vogels covers Amazon’s history, design principles and learnings from building a world-changing cloud services business. Watch the video for the entirety of the superb talk.
“Amazon is a technology company. We just happen to do retail”, Werner Vogels says. “Everything Amazon does is driven by deep technology stacks.”
Vogels describes Amazon’s move into cloud services from the perspective of the organization as a whole and its relations to its customers - both external and internal. Early on, getting big as fast as possible was more important than architectural coherence, and after realizing that most of their pain points were in the database world, Amazon adopted a service oriented architecture, where instead of direct DB access everything became encapsulated and accessed through APIs. This matched Amazon’s organizational structure of many small teams very well. “You need to be able to feed a team with two (large) pizzas”, Vogels says. With a structure like this, it is possible to bring a product to market in 10-15 days.
Currently, there are about 800 services internally, which means 800 teams, and “when you land on the front page of Amazon, or any other page, it hits about 200-300 services to construct that page for you.”
However, the productivity implications of such as structure were not always positive. Amazon found out that 70% of teams’ time was spent on managing their own infrastructure, the decision to provide this infrastructure was the beginning of Amazon’s cloud services.
Design for flexibility, design for on-demand and design for automation are the first three of Amazon’s design principles Vogels lists and expands with examples. Other principles Vogels goes through include designing for utility pricing (with fascinating examples of on-demand and spot pricing) and decomposing processes into simplest form (with an example of the role of key value operations in Amazon’s order processing chain). All of the design principles are valuable learnings to startups and you should watch the video for them, but it is worth highlighting the last three ones, especially for startups.
Focus on what doesn’t change: if you want to be really effective in innovation, look at things that will always be important to people. No customer will complain that Amazon is too cheap, Vogels says.
Let your customers benefit: “Since launch, [of cloud services] we’ve lowered our pricing 14 times”, Vogels says. Bring the same additional scale benefits into the retail and the service worlds.
Continuously innovate: “Amazon Web Services looks like a collection of 15 or 20 or 40 startups.” They launch a massive number of products all the time, with minimal feature sets, and then launch more features in tight cooperation with their customers. Products are launched so that customers can build their businesses on them, and the additional features are added continuously.
In closing, now, five years down the road, there is a radical shift happening in IT. “The old style of IT with licensing and long terms contracts will go, they are the dinosaurs of this world. This stuff will become like electricity”, Vogels says.
Watch more awesome talks from HackFwd’s events at Passion Meets Momentum.