Amazon Web Services uses a culture of reinvention to grow faster than competitors and fill customer requests for cheaper and more powerful cloud services, according to CEO Andy Jassy. AWS re:Invent started on Dec. 1 and runs through Dec. 17. The event is virtual this year for the first time.
Jassy opened AWS re:Invent with a keynote that covered the company’s financial successes, unique corporate culture, and new products and services. Jassy spent a few minutes at the start of the presentation to describe how fast the company has grown over the past few years. The company’s revenue run rate is $46 billion, which represents 29% year-over-year growth.
“It took us a little over 10 years to grow to a $10 billion business, then it took us only 23 months to go from $10 to $20 billion, 13 months to go from $20 to $30 billion, and then 12 months to go from $30 to $40 billion,” he said.
Jassy credited building a culture of reinvention and listening to customer requests as two keys to this success.
During the keynote, Jassy made these new product announcements:
- AWS Graviton2-powered C6gn instances deliver 100 Gbps networking performance
- AMD-powered G4ad Graphics Processing Unit (GPU) instances
- M5zn instances with an all-core turbo frequency of up to 4.5 GHz
- Next-generation Intel-powered D3/D3en instances
- Memory-optimized R5b instances deliver 3x higher performance compared to same size R5 instances for Amazon Elastic Block Store (EBS)
Jassy said these advances show that AWS can provide new instances to customers in a matter of months instead of two to three years.
AWS is also expanding local zones to Boston, Houston, and Miami, and plans to launch in 12 more US cities in 2021.
Jassy announced AWS Trainium that supports all the major frameworks for training machine learning algorithms at a lower cost.
Another new product is AWS Proton, a new application management service for container and serverless applications.
He said AWS has prioritized advances for instances, containers, and serverless in response to customer requests and will continue to do so over the next year.
8 tactics for building a culture of reinvention
Companies have to make reinvention a priority and be willing to transform many times over to survive, Jassy said.
Jassy said many companies wait too long to reinvent, such as at a crisis point. The key to success is building a “reinvention culture” that bakes this approach into everyday operations. Jassy used these eight points to explain how to succeed at reinvention.
- Have the will to invent and reinvent
Inventing is building new offerings while reinvention is redoing existing products and services. Jassy named Airbnb, Peloton, and Stripe as talented reinventors. The key to being able to do this is to be relentless about getting to the truth of a business in terms of competitors, successes and failures, and current performance.
“You have to challenge people who may know more than you do and you have to have the courage to pick the company up and force them to change,” he said
2. Acknowledge that you can’t fight gravity
Jassy used the example of Netflix building out its streaming content at the expense of its DVD business to illustrate this point.
“It’s better to cannibalize yourself than having someone else do it to you,” he said.
Business leaders need to be able to accept reality and use current conditions to make fundamental changes to the business model, no matter how painful this may be. Jassy said that the decision to add third-party sellers was a difficult one for Amazon. This painful decision paid off in the long run now that third parties now make up more than half of Amazon’s retail sales.
3. Recruit and promote people who are hungry to invent
Jassy said that it’s no accident that new employees often lead digital transformation work because reinvention requires experienced people to rip up something they have built.
“Look for people who are curious about learning and excited about reinventing the customer experience,” he said.
4. Solve real customer problems with builders
The key to this tactic is to focus on customer needs, not cool technology. Jassy said leaders must avoid the “leave it to the experts” tendency that many technologists have.
“Make sure engineers are working on problems that really matter to customers,” he said.
5. Speed is a choice
Many enterprise leaders have resigned themselves to the fact that they have to move slowly, Jassy said, which is deadly in a reinvention culture. The ability to move fast is a muscle that must be exercised regularly to keep it ready for action.
“Speed is a choice, and you’ve got to set up a culture that has urgency and that actually wants to experiment,” he said. “If you don’t have the ability to have speed, you won’t be able to reinvent.”
6. Keep it simple at the start of a transformation
In a clear plug for AWS, Jassy recommended that companies pick one partner to support a big IT project. This avoids the complexity that comes with working with multiple vendors to get a new project off the ground.
“It’s easier to be successful if you choose a partner and get momentum and success first and layer on complexity later,” he said.
7. Use the platform with the broadest set of tools
Jassy said that AWS’ operational maturity gives the cloud provider an edge over competitors. AWS is in the upper right quadrant of Gartner’s magic quadrant for cloud providers in 2020 with the highest marks for completeness of vision and ability to execute. Jassy said AWS has been the leader for the last 10 years on both axes.
8. Compel action with aggressive top-down goals
Jassy described CIO Jamie Miller’s work at GE as an example of how to get IT teams to move fast. During her tenure at the company, Miller set the goal of moving 50 apps to AWS in 30 days. Despite protests, the team moved 42 apps in 30 days. During that time the team figured out new governance and operational models. This success built momentum for the next ambition goal of moving 9,000 apps to the cloud over the next few years.
“This forces the organization to understand that you can’t dip your toe in slowly, you must move,” Jassy said. “Most of these keys I mentioned are not technical—they are about leadership.”
Editor’s note: This article will be updated with additional information.