Amazon: How To Reinvent Yourself, or

How to Fix It Long Before It Breaks

By Shlomo Maital    

 

 

  Jeff Bezos is 48 years old. A graduate of Princeton Univ. he worked as a financial analyst before founding Amazon.  His creativity is worth close study, because Bezos has managed to retain Amazon’s exceptional innovative spirit, time and again reinventing it even though it is highly bottom-line successful. 

   First, he reinvented bookselling, by offering ten times more titles than a bookstore could. Next, he broadened his product range far beyond books, making Amazon into one of the world’s largest retailers. Next, he invented Kindle, and taught us how to carry whole libraries around in a tiny device, while shifting publishing from Gutenberg-era paper to 21st C. eInk.  And now?  He’s bidding to dominate the Cloud, offering businesses infinite computer power for rent.  

    In an article in today’s Global New York Times, (Active in Cloud, Amazon Reshapes Computing, by Quentin Hardy),  Amazon’s latest reinvention is revealed:  “Within a few years, Amazon.com’s creative destruction of both traditional book publishing and retailing may be footnotes to the company’s larger and more secretive goal: giving anyone on the planet access to an almost unimaginable amount of computing power.”

   According to Hardy,  “Every day, a start-up called the Climate Corporation performs over 10,000 simulations of the next two years’ weather for more than one million locations in the United States. It then combines that with data on root structure and soil porosity to write crop insurance for thousands of farmers.  Another start-up, called Cue, scans up to 500 million e-mails, Facebook updates and corporate documents to create a service that can outline the biography of a given person you meet, warn you to be home to receive a package or text a lunch guest that you are running late.   “I have 10 engineers, but without A.W.S. I guarantee I’d need 60,” said Daniel Gross, Cue’s 20-year-old co-founder. “It just gets cheaper, and cheaper, and cheaper.” He figures Cue spends something under $100,000 a month with Amazon but would spend “probably $2 million to do it ourselves, without the speed and flexibility.”  Each of these start-ups carries out computing tasks that a decade ago would have been impossible without a major investment in computers. Both of these companies, however, own little besides a few desktop computers. They and thousands of other companies now rent data storage and computer server time from Amazon, through its Amazon Web Services division, for what they say is a fraction of the cost of owning and running their own computers.”

   What Bezos has done is phenomenal:  He tells startup inventors, Imagine! Imagine you have infinite computing power, beyond what you could ever dream to afford. Now think of how you could use it.  And then – drop me a line, I’ll make it happen.

   According to Hardy, “Cloud computing has been around for years, but it is now powering all kinds of new businesses around the globe, quickly and with less capital. Instagram, a 12-person photo-sharing company that was sold to Facebook for an estimated $1 billion just 19 months after it opened, skipped the expenses and bother of setting up its own computer servers. EdX, a global online education program from the Massachusetts Institute of Technology and Harvard, had over 120,000 students taking a single class together on A.W.S. Over 185 United States government agencies run some part of their services on A.W.S. Millions of people in Africa shop for cars online, using cheap smartphones connected to A.W.S. servers located in California and Ireland. “

    A.W.S. is a powerful business, generating $1 b. in revenue. But it is also a reflection of Bezos’ vision, to empower innovators, and let them think big, be big, even when they are very small.  Hardy writes:  “Jeff thinks on a planetary level,” said David Risher, a former Amazon senior executive who now heads a charity called Worldreader, which uses A.W.S. to download books to thousands of computers in Africa. “A.W.S. is an opportunity, as a business. But it is also a philosophy of enabling other people to build big systems. That is how Amazon will make a dent in the universe.”