Thursday, April 7, 2016

AWS Will Generate $10 Billion in 2016 Revenue, Amazon Says

Amazon Web Services will reach $10 billion in annual sales in 2016, according to a Securities and Exchange Commission filing by Amazon, reaching that level even faster than Amazon did.

Amazon CEO Jeff Bezos says in the same filing that the company has achieved those successes  because Amazon has an organizational culture “that cares deeply about and acts with conviction on a small number of principles” of “customer obsession rather than competitor obsession, eagerness to invent and pioneer, willingness to fail, the patience to think long-term.”

“One area where I think we are especially distinctive is failure,” Bezos said. “I believe we are the best place in the world to fail (we have plenty of practice!), and failure and invention are inseparable twins.”

“To invent you have to experiment, and if you know in advance that it’s going to work, it’s not an experiment,” said Bezos.

CIS Q115
source: Synergy Research

“Most large organizations embrace the idea of invention, but are not willing to suffer the string of failed experiments necessary to get there,” Bezos said.

That is not such a “dumb” behavior, even Bezos admits. “Outsized returns often come from betting against conventional wisdom, and conventional wisdom is usually right,” Bezos said.

In other words, conventional wisdom is right, perhaps 90 percent of the time.

“Given a ten percent chance of a 100 times payoff, you should take that bet every time,” said Bezos. “But you’re still going to be wrong nine times out of ten.”

Not many firms can withstand that level of “failure.”

Figure 1 cloud revenue
source: IDC

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