Amazon's Bezos: We excel at failure
CEO explains what sets AWS and Amazon apart from competitors as he reveals public cloud giant will hit $10bn in sales this year
Amazon founder and CEO Jeff Bezos has claimed Amazon Web Services (AWS) and the rest of his empire is the "best place in the world to fail" as he revealed the public cloud ace will hit the $10bn (£7.1bn) sales mark this year.
In a letter to shareholders, Bezos talked up Amazon's business model as he claimed the e-tailer and IT services giant was the fastest company ever to reach $100bn in annual sales.
AWS will be a $10bn-turnover business this year, achieving the magic marker at a faster pace than even Amazon.com did, Bezos said.
Despite appearing to be chalk and cheese, Amazon's book-selling and IT services businesses share a "distinctive organisational culture" based on principles such as "customer obsession" an "eagerness to invent" and a "willingness to fail", Bezos (pictured) said.
He expanded on the latter point in particular, saying that failure is one area in which Amazon has earned distinction, a sentiment that received the backing of Kelway founder Phil Doye on Twitter.
"I believe we are the best place in the world to fail (we have plenty of practice!), and failure and invention are inseparable twins," Bezos said.
"To invent you have to experiment, and if you know in advance that it's going to work, it's not an experiment. Most large organisations embrace the idea of invention, but are not willing to suffer the string of failed experiments necessary to get there. Outsized returns often come from betting against conventional wisdom, and conventional wisdom is usually right. Given a 10 per cent chance of a 100 times payoff, you should take that bet every time."
AWS, Marketplace and Prime are all examples of "bold bets" that have paid off, Bezos went on to say.
AWS is bigger than Amazon.com was at 10 years old and its pace of innovation is accelerating, Bezos said, highlighting the fact it announced 722 significant new features and services in 2015, up 40 per cent on 2014. He cited AWS' 51 price drops as evidence of its customer-centric approach to pricing.
"Many companies describe themselves as customer-focused, but few walk the walk," he said. "Most big technology companies are competitor focused. They see what others are doing, and then work to fast follow. In contrast, 90 to 95 per cent of what we build in AWS is driven by what customers tell us they want."
Finally, Bezos used the letter to drop some intriguing hints about where AWS is heading next.
"AWS is already good enough today to attract more than a million customers, and the service is only going to get better from here," he said.
"As the team continues their rapid pace of innovation, we'll offer more and more capabilities to let builders build unfettered; it will get easier and easier to collect, store and analyse data; we'll continue to add more geographic locations; and we'll continue to see growth in mobile and "connected" device applications. Over time, it's likely that most companies will choose not to run their own datacentres, opting for the cloud instead."