The Six Main Benefits of Cloud Computing with Amazon Web Services

I thought I would share some of the main reasons that we're finding why so many customers are moving to the cloud and why they're doing it so quickly. And there are a few benefits that we hear frequently from customers that they would cite as the most important reasons. The first thing is if you can trade capital expense for variable expense, that's very attractive. Instead of having to lay out all those, all that capital for data centers and servers before you know how you're going to use them. And if you don't have to do that, and instead just pay as you consume resource on a variable basis, that's very appealing. On top of trading capital expense for variable expense, customers love the fact that in the cloud, they get to pay a lower variable expense than they can do on their own. And that's because AWS is able to take its very large scale and pass those on to customers in the form of lower prices. And we have this very interesting virtuous circle going on, which is as we have more customers who use AWS more, it means we have to go buy more infrastructure. But as we buy more infrastructure, we get economies of scale which lower our infrastructure costs. And as we lower our infrastructure costs, we're able to lower our prices to customers, which drives more customers. So it's a very useful virtuous circle for both customers and for aws. And then it turns out that you can inject energy into this flywheel. So as we add new services and new features and as we expand our global footprint, and as we continue to partner with our very large and growing ecosystem so that more companies can run the applications they want to run on aws, and more companies get help from systems integrators to actually get moving to the cloud, it turns out that we're able to spin that flywheel faster. And as we're able to continue to innovate on our infrastructure, so in our data centers and on our network and with hardware, we're able to get better economies of scale, which lets us lower our infrastructure costs, lower our prices, and again, spin the wheel going faster. And you've seen this bear out as we have lowered prices on 23 different occasions in the last few years, largely in the absence of any competitive pressure to do so. The third thing that customers tell us that they really like about the cloud is that they don't have to guess on capacity anymore. So any of you that have tried to launch a new project know that you have to guess what your capacity is going to be, and that's actually really hard to do without knowing what the customer response is. And so what happens is you end up making some projection represented by the green dotted line. And the actual usage is often something like the solid white line. And what that means is that in the beginning you actually are sitting on a lot of wasted capital and resource until your application takes off. And then if it does, you're left with too short capacity and you either have to decide to provide a bad customer experience which most people don't choose, or you have to run around like a chicken with your head cut off and find somebody who can get you that infrastructure quickly. And you almost always overpay and over commit to do it. In the cloud, that problem goes away. You don't have to guess. You provision as much resource as you think you need early on. If it turns out you need more, you seamlessly scale up. If it turns out you don't need as much as you provisioned at one point, you just give it back to us and stop paying. That's a very different model than the last 30 years. The fourth thing customers tell us is that the cloud dramatically improves how quickly they can get to market with whatever applications they're thinking about. In the old world, if you talk to an engineer at an enterprise or a company and you ask them how long does it take you to provision a server for something new or to put something in intag, we got answers when we asked customers this. That range from six to 20 weeks. That's maddening. Six to 20 weeks for a single server. And what it does is it just stifles innovation. People figure why bother if it's going to take so long just to get a server in the cloud you can provision completely on your own self service. You don't have to talk to anybody, hundreds or even thousands of servers in minutes. And that really changes how quickly you can deploy applications. The two most important things are number one, being able to try a lot of experiments, and number two, if those experiments don't work, and many of them should not work, if you're really pushing the envelope not to have to live with the collateral damage of a failed experiment. And in the cloud you can spin up thousands of instances in minutes. So you can try any experiments that you guys as a team come up with and if they don't work, just give them back to us or use them for other experiments you want to try. Really changes the game and how fast companies can move their businesses forward. The fifth thing we hear from customers is that their scarce resource in most companies is software development. Engineers, engineering teams have this long list of priorities and, and projects that the company wants them to do and you're left with this unpleasant experience of having to try to prioritize between them. And those or decisions are really specious. They're really hard to make the right ones. We know from the early days of Amazon it was near impossible. If you can take that scarce resource who are software development engineers, and instead of having them focus on the infrastructure, which is important but hardly ever differentiates your business, and instead have them focus on projects that move your mission or your business forward, that's a huge advantage. The sixth thing we hear from our customers is that they like the fact that they can provide a global, high quality end user experience all over the world. So virtually every company now, even startups from day one, given the nature of the Internet and the mobile world we live in, have global end users. And so in the old world, people would store their applications or run their applications in one data center or a couple data centers in one geography. And the idea of actually being closer to their global end users seemed like a nice to have, but I don't know how I'm gonna do it. I don't know who to rely on, I don't know how to contract with them, I don't speak the language. In some cases it just seems like it's not gonna be easy to do and so most don't. But in the cloud, the game changes. You can have your application in any one of the nine regions AWS has all over the world. And that means you can provide a lower latency experience for your customers, which is a much better end user customer experience. So in summarizing the benefits, the main benefits of why people are moving so fast to the cloud, it's that they get to change capital expense for variable expense, pay a lower variable expense than they can do on their own. They don't have to guess in capacity, they can move quicker, which enables a lot more innovation. They get to spend their scarce SDE resource on projects that move the business forward and they can go global with their application presence in minutes.