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Quick takeaways
- Amazon Web Services (AWS) was born out of Amazon's internal transition to a service-oriented architecture, allowing for faster innovation and scalability through APIs.
- AWS transformed from an internal service to an external cloud computing provider, offering scalable and cost-effective IT infrastructure solutions for businesses.
- Under Andy Jassy's leadership, AWS rapidly expanded its range of cloud computing services, prioritizing documentation and standardized interfaces for seamless access.
- AWS revolutionized the IT industry by enabling businesses of all sizes to rapidly scale, reduce costs, and drive innovation.
- AWS successfully targeted both startups and enterprises, disrupting traditional IT models and becoming a dominant player in the cloud industry.
- Despite facing missed opportunities and ongoing challenges, AWS maintains its position as a leading cloud provider, with a significant presence in the database market.
Deep dives
Origin Story: Transitioning to a Service-Oriented Architecture
In the early 2000s, Amazon faced challenges with its monolithic software codebase and slow development cycles. Jeff Bezos and Andy Jassy spearheaded the transition to a service-oriented architecture, where teams communicated through APIs instead of direct communication. This allowed for faster innovation, independent development, and better scalability. The concept of APIs was influenced by the idea of Web 2.0 and its focus on participatory culture and interoperability. This internal transformation laid the groundwork for the future development of Amazon Web Services (AWS).
Origin Story: The Vision for External-Facing Cloud IT Infrastructure
As Amazon successfully implemented APIs internally, they realized the potential to offer their IT infrastructure as a service to external customers. Andy Jassy proposed the idea to Jeff Bezos, and they transformed AWS into an external-facing cloud computing service. The initial vision called for the creation of a comprehensive suite of cloud-based IT infrastructure services accessible through APIs. This involved hiring new talent, including Adam Selipsky and Jeff Lawson, to build and lead the AWS team. The goal was to provide scalable, reliable, and cost-effective IT infrastructure solutions for businesses.
Expansion and Growth of AWS
Under Andy Jassy's leadership, AWS expanded rapidly, offering a wide range of cloud computing services such as Amazon S3 for storage and Amazon EC2 for scalable computing resources. AWS prioritized documentation and standardized interfaces to ensure seamless access to its services. The company continued to innovate, adding new functionalities and APIs. AWS quickly gained traction and soon became a leader in the cloud computing industry, attracting customers from various sectors, including startups and established enterprises.
Current Status and Impact of AWS
Today, AWS is one of the largest and most influential cloud computing providers globally. It offers a comprehensive suite of services, including compute power, storage, databases, networking, and artificial intelligence. AWS has revolutionized the IT industry, enabling businesses of all sizes to scale rapidly, reduce costs, and drive innovation. Its impact extends far beyond Amazon, with AWS serving as the foundation for numerous startups, large enterprises, and government organizations worldwide.
AWS: From Startups to Enterprises
AWS began by targeting startups, offering them the ability to quickly and easily build web applications using cloud infrastructure as primitive building blocks. This approach allowed startups to scale rapidly and significantly disrupted traditional IT models. However, AWS didn't stop at startups. They recognized the importance of serving enterprises as well and successfully catered to their needs by offering enterprise-level compliance, support, and infrastructure solutions. This expansion into the enterprise market, coupled with their ongoing focus on startups, has helped AWS become a dominant player in the cloud industry.
The Unmatched Growth of AWS
Since its launch, AWS has experienced remarkable growth and success. In its early years, it achieved a $6 billion revenue run rate and now boasts an incredible $80 billion annual revenue run rate. This growth can be attributed to AWS's ability to provide a wide range of services, including compute, storage, and databases, along with their commitment to innovation. Their market size remains unconstrained, as they continue to capture a substantial portion of the cloud market, surpassing competitors like Microsoft Azure and Google Cloud Platform. With a backlog of committed contractual revenue exceeding $100 billion, the future looks exceedingly bright for AWS.
The Impact of AWS in Database Market
One often overlooked aspect of AWS's success is its significant presence in the database market. While AWS offers a variety of services, databases play a pivotal role in their operations and revenue. With offerings such as Amazon Aurora and Amazon Redshift, AWS has been able to gain market share and compete with traditional database providers like Oracle. They have successfully convinced customers to migrate from legacy databases to their cost-effective, high-performance solutions. This has led to substantial revenue growth in the database segment and solidified AWS's position as a leading player in the industry.
Missed Opportunities and Ongoing Challenges
While AWS has achieved unparalleled success, they have also faced some missed opportunities and ongoing challenges. For instance, they did not enter the data warehouse market with a competitive product, allowing companies like Snowflake to gain significant market share. Additionally, AWS's expansion into the enterprise market presented its own set of challenges, requiring them to navigate complex security, operational, and compliance requirements. Despite these obstacles, AWS continues to innovate and adapt, maintaining its dominant position in the cloud industry and driving the future of cloud computing.
Carmack interview highlights AI and game development
The interview with John Carmack delves into his expertise in AI and game development. Carmack's deep knowledge and experience in the industry make for an engaging discussion. He shares insights into the strained relationship with co-founder John Romero and discusses their recent reconciliation. The interview also reveals Carmack's current focus on artificial general intelligence and his involvement with Oculus and meta in the virtual reality realm.
Moon Knight showcases outstanding acting
The Marvel show Moon Knight stands out for its exceptional acting, particularly by Oscar Isaac in the lead role. Isaac's performance is captivating and reminiscent of Broadway-level theatricality. While the writing is not on par with other Marvel shows like Loki and WandaVision, Isaac's portrayal makes the series highly enjoyable. Moon Knight offers a compelling viewing experience for fans of the Marvel Cinematic Universe.
AWS's strong market position with AWS
AWS, the cloud division of Amazon, holds a significant advantage in the market with its strong market leadership and well-established position. The episode highlights AWS's ability to meet enterprise customer needs and maintain customer trust. Despite the extensive range of services provided, AWS demonstrates a commitment to customer use cases and continuously improving its offerings. With its robust scale economies and a vast number of services, AWS remains a dominant force in the cloud computing industry.
1.
Introduction
2min
2.
AWS's Operating Income Is Bigger Than Amazon's Retail Business
2min
3.
Fundrise Innovation Fund
6min
4.
Jeff Bezos and Amazon
2min
5.
I Wrote Behemoth in My Notes Pioneer Inventor
2min
6.
The Origin Story of Amazon Web Services
1min
7.
The Urban Legend of Amazon.com
2min
8.
Is There a Future for Cloud Computing?
2min
9.
The Excess Capacity Myth Is a Myth
2min
10.
The Origin Story of AWS
2min
11.
Web 2.0 - What It Means
2min
12.
Do You Want to Be a Web 2.0 Company?
2min
13.
The Origin Story of Amazon Web Services
3min
14.
The Origin of Cloud Computing and IT Infrastructure
2min
15.
Shell Capen's Amazon Web Services Web 2.0
2min
16.
Code Freezes at Amazon Going Into the Holidays
2min
17.
What's the Biggest Problem in Software Development?
2min
18.
Technical Assistant - Jeff's Shadow
2min
19.
How to Build Out Our Engineering Management Discipline
2min
20.
What Is the Origin of Product Management in Silicon Valley?
3min
21.
What Is Service Oriented Architecture?
2min
22.
The Difference Between Google Culture and Amazon Culture
3min
23.
What Makes Your Beer Taste Better?
2min
24.
Pilot.com Is a Startup Company Run on APIs
3min
25.
Pilot - A New Way to Accelerate Your Infrastructure
2min
26.
AWS Origin Story Number Three - Software Engineering
2min
27.
What's the Legend of Amazon?
2min
28.
Andy Whiteboards 57 People to Go Taking Over AWS
2min
29.
The Amazon Culture and the New CEO of Amazon
2min
30.
AWS - The Origin of AWS
3min
31.
S3 Is the First Service to Launch by Itself in March 2006
2min
32.
AWS Origin Story - The Dissenting Narrative
4min
33.
EC2 Is Born in Isolation
3min
34.
Aws
3min
35.
AWS Launches With Primitives
2min
36.
AWS - What a Disruptive Innovation
2min
37.
The AWS Startup Challenge
2min
38.
AWS Becomes Successful for Startups
2min
39.
The Six Reasons AWS Wins Versus Traditional Infrastructure for Enterprises
2min
40.
Building in the Cloud on AWS
2min
41.
AWS - The Platform of the Future
3min
42.
Amazon Becomes the Most Important Market of All Time
2min
43.
Amazon Cloud Private Cloud, Is This Really a Disruptive Pricing Model?
2min
44.
Aws
6min
45.
Oracle and Microsoft - What's the Biggest Loser?
3min
46.
Google Cloud Platform - What Is GCP?
2min
47.
AWS Redshift - The Official Amazon Talk Track
2min
48.
The Database Market Is Frustratingly Big
4min
49.
AWS Is on an $80 Billion Revenue Run Rate, 8-0
2min
50.
Amazon Is Market Size Unconstrained
2min
51.
AWS Is What Powers the Internet
2min
52.
AWS Restructure - Is That Crazy?
2min
53.
The Machine Learning Capabilities That Amazon Has Need to Be Good
3min
54.
AWS Data Warehouses - It's AWS's Biggest Failure
3min
55.
AWS Is a Victim of Their Own Success
3min
56.
The Margin of Safety in Complexity Investing
4min
57.
Is AWS a Platform as a Service?
2min
58.
Scaling Costs, Network Economy, and Cornered Resource
2min
59.
Is There a Tailwind for Microsoft?
3min
60.
Is Apple's iCloud a Good Idea?
2min
61.
Is AWS the Best Scale Economy?
2min
62.
AWS Is the Ultimate Scale Economy Business
3min
63.
AWS and Amazon.com - Is AWS the Same?
2min
64.
The Evolution of Multi Cloud and Hybrid Cloud
2min
65.
Cloud - What's It All About?
3min
66.
AWS Is the Highest Performing Venture Capital Investment in History
2min
67.
AWS and Amazon Web Services
2min
68.
What Is a Market Cap?
2min
69.
Are You Holding Amazon Indefinitely?
2min
70.
Is Amazon Strategic in Letting Microsoft Back in the Game?
2min
71.
A Stock Is a Piece of a Business
2min
72.
Obi-Wan Kenobi - Star Wars Episode 3
2min
73.
Lex Freedman Interview With John Carmack
4min
So, how DID an online book retailer end up building the infrastructure layer that powers the entire internet? (Or at least 39% of it, per latest market share data.) While many myths, legends, and some downright falsehoods exist, the real answer to that question deserves a full Acquired episode of its very own. So here it is: the story of Amazon Web Services. Who’s got the truth? Tune in and find out. :)
If you want more Acquired, you can follow our newly public LP Show feed here in the podcast player of your choice (including Spotify!).
Sponsors:
Statsig: https://bit.ly/acquiredstatsig24
Vanta: https://bit.ly/acquiredvanta
Crusoe: https://bit.ly/acquiredcrusoe
Links:
Carve Outs:
Note: Acquired hosts and guests may hold assets discussed in this episode. This podcast is not investment advice, and is intended for informational and entertainment purposes only. You should do your own research and make your own independent decisions when considering any financial transactions.
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