6 takeaways from Dr Werner Vogels’ Amazon Summit keynote

Amazon held its Amazon Web Service (AWS) Summit in Cape Town this week, aimed squarely at developers and enterprises looking to learn more about their cloud offerings. Ordinarily, this wouldn’t be something to pique my interest, but the presence of Dr Werner Vogels, CTO of Amazon and cloud pioneer, made for an interesting keynote.

Amazon’s cloud efforts have an SA link

It might not come as news to some, but did you know that Amazon’s EC2 cloud computing offering was actually developed in South Africa for the most part. An Amazon executive said that EC2 effectively started at “a small office in Constantia” ten years ago, employing a dozen people.

“Some of the birth (sic) of AWS was here in Cape Town,” Vogels added.

The division is seeing some impressive growth

Vogels was quick to tout AWS’s success, saying it now sees over a million active customers a month and 64% year on year growth. The Amazon executive said they also saw data transfer growing by 102% from 2014 to 2015.

Vogels touted the AWS business model, but…

The Amazon CTO also spoke about the “pay as you use” business model for AWS, claiming it was better than the “extortionist” business techniques used by rivals, such as lower prices by way of contracts.

“We wanted to make sure there was a model that put you as a customer in charge,” he said. But Google’s cloud offering is still substantially cheaper, if the Mountain View firm’s calculations are believed. Further to that, the AWS system of “reserved instances” is seen by some as a contract in exchange for cheaper prices.

A few words on SA’s fintech industry

Vogels also mentioned the emergence of “young” businesses in South Africa’s payment industry, saying they would be the biggest threat to the top banks in the country.

“Competition for (SA) banks isn’t coming from other banks but these young businesses,” he noted.

He reckons that most S&P 500 firms will be gone by 2025

Vogels stressed that today’s companies are seeing shorter and shorter lifetimes.

“If you look back, let’s say, 50 years or something like that, the average lifetime of a company on the S&P500 was 60 years… Today, it’s 13 years,” he explained.

“The expectation is that, (of) all the companies that are now on the S&P 500… 75% will no longer exist in 2025,” he added.

No word on AWS infrastructure in Africa

Generally speaking, a cloud service provider wants to be as close to its customers as possible, with AWS having 13 regions hosting infrastructure. Vogels didn’t shed light on any AWS infrastructure in South Africa or Africa at large, but said that they were set to launch in Ohio, Montreal and London.