Amazon Web Services: A Technological and Cultural Change with the Cloud

Andy Isherwood is the Managing Director, Europe Middle East, and Africa, at Amazon Web Services (AWS), responsible for leading AWS’s business and operations across the EMEA region. He leads a team of business and technical specialists working with organisations of all sizes, from start-ups through to the world’s largest enterprises, to support their move to the cloud. The team he leads also collaborates with technology and consulting partners across the region to help them build transformational businesses.

We spoke with Andy about Amazon Web Services and its success in the cloud computing world, as well as how cloud technology can be of exceptional use in the corporate landscape.

 

What is Amazon Web Services (AWS)?

We are the cloud computing part of Amazon. You can think of cloud computing in a similar way to how consumers flip a switch to turn on lights in their home and the power company sends electricity. With cloud computing, AWS manages and maintains the technology infrastructure in a secure environment and businesses access these resources via the Internet. Capacity can grow or shrink instantly and businesses only pay for what they use. AWS first started delivering cloud services to customers in 2006 and over the last 13 years we have grown our portfolio to include a broad range of services including, compute, storage, databases, networking, analytics, robotics, machine learning (ML) and artificial intelligence (AI), Internet of Things (IoT), mobile, security, hybrid, virtual and augmented reality (VR and AR), media, and application development, deployment and management.

AWS works with millions of customers around the world, and hundreds of thousands in Europe, from the fastest growing startups to large, established enterprises, public sector organisations, and government agencies. We serve customers around the world from our network of 66 Availability Zones, across 21 geographic regions, meaning customers can deploy their technology and launch their businesses globally in minutes.

Some of the world’s largest enterprises are using AWS to modernise, transform, and innovate. Openbank, a subsidiary of Santander Group, is running production workloads on AWS, including its website, mobile application, and core banking system. Openbank plans to expand internationally using AWS’s global infrastructure. Standard Bank Group, the largest bank in Africa, has also selected AWS as its preferred cloud provider and is leveraging AWS’s services, including data analytics and machine learning, to automate financial operations and enhance customer facing web and mobile applications. Another example is 21st Century Fox. They use AWS for the vast majority of their key platforms and workloads. They are also leveraging AWS’s ML and data analytics services to support their brands such as FOX, FX, National Geographic, 20th Century Fox Television, 20th Century Fox Film, and FOX Sports.

Similarly, many of the consumer apps that have become household names in the last few years may not have become as pervasive as they have today without AWS. Companies like Netflix, Airbnb, Deliveroo, Uber, Shazam, WeTransfer and FanDuel were able to very quickly launch their new ideas, without having to secure a lot of capital first, and then have been able to scale globally based on consumer demand at a speed that simply would not be possible if they had to build their own data centres.

 

What is behind AWS’s success, especially in the last few years?

Something customers tell us they love about AWS is the freedom we give them. The AWS Cloud frees up companies and organisations to focus on what really differentiates their organisations – such as drug discovery to find cures for illnesses, producing the most entertaining video content, building great mobile apps, or even exploring Mars – and leave the undifferentiated heavy lifting of the underlying technology infrastructure to AWS.

Whether it’s in regulated industries like financial services with Starling Bank, Monzo, Openbank, and Intuit, clinical trial simulations with AstraZeneca, Novartis, and SkinVision, streaming movies and developing original series for Netflix, ITV, or the BBC, or operational support for BP, Enel, Continental, and NASA Jet Propulsion Laboratory missions, successful customer implementations on AWS are accelerating. Every imaginable business segment is using AWS in a very meaningful way.

The reason why customers are choosing AWS over other providers is because it has a lot more functionality, the largest and most vibrant community of customers and partners, the most proven operational and security expertise, and the business is innovating at a faster clip – especially in new areas such as ML and AI, IoT, and Serverless Computing.

AWS has more services, and more features within those services, than any other cloud provider – by a large amount. AWS is also innovating faster than anyone else, and that gap in capability continues to expand. In 2018 we released 1,957 new significant services and features compared with 80 in 2011.

Our experience, maturity, reliability, security, and performance is unmatched. Internally, we say that there’s no compression algorithm for experience, and that’s because you can’t learn certain lessons until you get to different milestones in scale. With millions of active customers every month, AWS has many times the usage of other cloud providers who just haven’t learned those lessons yet.

 

How is AWS different from other technology providers?

When you look closely, there are three areas where AWS is different. First of all, we’re unusually customer-focused. Many companies say this, but very few walk that walk. Most of the big technology companies are competitor-focused. They look at what the competitors are doing, and they try to one-up the competitors. That can be a very successful strategy, it’s just not ours. 90 percent of what we build is driven by what customers tell us matters, and the other 10 percent are things we hear from customers where they may not articulate exactly what they want, but we try to read between the lines and invent on their behalf.

Second, we’re pioneers. Most large technology companies have lost their will and DNA to invent. They acquire most of their innovation. Don’t get me wrong, it’s a strategy that can work, it’s just not ours. We like to hire builders who look at customer experiences that are flawed, then figure out how to reinvent those. In a space that’s moving as fast as the cloud is, to be partnered with the company that has the most functionality, that’s iterating the quickest, has the largest community, had the vision for cloud from the start without having to patch together acquisitions, that’s very attractive.

Third, we’re unusually long-term oriented. You won’t see our folks show up at customers’ doors a day before the end of the quarter or the day before the end of the year and try to harass them into a sale, not to be seen again for a year. We’re trying to build relationships and a business that lasts longer than all of us. And you do that by doing right by customers over a long period of time.

An example that ties this all together is a capability in our support function called AWS Trusted Advisor. We’ll look at customers’ utilisation of our resources, and if they’re low or idle, we’ll reach out to them and say, maybe you don’t want to spend this money right now. Over the last couple years, we’ve used AWS Trusted Advisor to tell customers how to spend less money with us, leading to hundreds of millions of dollars in savings for our customers every year. And so I ask you, how many technology companies call up their customers and say, stop spending money with us? Not too many.

When we first started doing this, people thought it was a gimmick, but if you understand our culture, it makes perfect sense, because we don’t want to make money from customers unless they’re getting value. We want to reinvent an experience that hasn’t been a very good one for customers over the last several decades.

 

What are the benefits of cloud technology, such as the ones AWS provides, in the corporate world?

There are five reasons companies are moving so quickly to the AWS cloud.

The first is agility. AWS lets customers quickly spin up resources as they need them, deploying hundreds or even thousands of servers in minutes. This means customers can very quickly develop and roll out new applications, and it means teams can experiment and innovate more quickly and frequently. If an experiment fails, you can always de-provision those resources without risk.

The second reason is cost savings. If you look at how people end up moving to the cloud, almost always the conversation starter ends up being cost. AWS allows customers to trade capital expense for variable expense, and only pay for IT as they consume it. And, the variable expense is much lower than what customers can do for themselves because of AWS’s economies of scale. For example, Dow Jones has estimated that migrating its data centres to AWS will contribute to a global savings of $100 million in infrastructure costs.

The third reason is elasticity. Customers used to over provision to ensure they had enough capacity to handle their business operations at the peak level of activity. Now, they can provision the amount of resources that they actually need, knowing they can instantly scale up or down along with the needs of their business, which also reduces cost and improves the customer’s ability to meet their user’s demands.

The fourth reason is that the cloud allows customers to innovate faster because they can focus their highly valuable IT resources on developing applications that differentiate their business and transform customer experiences instead of the undifferentiated heavy lifting of managing infrastructure and data centres.

The fifth reason is that AWS enables customers to deploy globally in minutes using AWS’s 66 Availability Zones across 21 geographic regions worldwide. For example, fast growing German startup, mytaxi, has been using AWS since the company was launched in 2009. Since then they have gone through massive growth and now serve over 10 million users and 45,000 taxis in more than 40 cities worldwide. Without AWS, mytaxi would not have been able to go through the rapid growth that they have seen. As a result of their rapid growth they were acquired by automotive conglomerate Daimler for an undisclosed sum in September 2014.

You should also know that security is job zero for us at AWS and will always be our top priority. Examining the AWS cloud, you’ll see that the same security isolations are employed as would be found in a traditional data centre. These include physical data centre security, separation of the network, isolation of the server hardware, and isolation of storage.

We have a shared responsibility model with the customer; AWS manages and controls the components from the host operating system and virtualisation layer down to the physical security of the facilities in which the services operate, and AWS customers are responsible for building secure applications. We provide a wide variety of best practices documents, encryption tools, and other guidance our customers can leverage in delivering application-level security measures. In addition, AWS partners offer hundreds of tools and features to help customers meet their security objectives, ranging from network security, configuration management, access control, and data encryption. We have also had customers, like Vodafone Italy or Royal Dutch Shell, that have publicly stated they are more secure on AWS than they are in their own data centres.

 

Is there anything regarding the cloud that is commonly misunderstood or is widely unknown that you could shed light on?

One of the most misunderstood concepts is the move to cloud is much more than a technological change, it is also a cultural change and requires a new way of thinking. When technology is available on-demand, old world innovation and procurement cycles of weeks, or in most cases months, don’t work.

I spend a lot of my time speaking to CEOs, COOs, CFOs, and other business leaders talking to them about the cultural nuances of moving to cloud. The number one question they ask is: what is the correct way to adopt the cloud? I’m not sure there is one correct way, but we show them what we have seen that works.

One of the first things we do when working with large, enterprise businesses is to develop what we call an AWS Cloud Enablement Engine. This is a dedicated business unit within the organisation that is focused on helping with the cultural changes needed to get the most from the cloud. This can be everything from setting up governance frameworks, so cloud consumption can happen in line with an organisation’s regulatory obligations, through to developing training and certification programs to up-skill all employees on AWS technologies and new ways of thinking.

To further support the cultural change the cloud brings, we also deliver Digital Innovation Training for customers. These are workshops that help enterprise businesses to move faster, increase their decision making, and reduce the cost of experimentation. For many large, traditional businesses this is a real challenge as transforming the mindset within an organisation, and in the boardroom, can be complex. Interestingly, one of the big changes in thinking we teach customers is accepting the notion that not every project has to be hailed a triumph, so long as lessons are learned. It’s about embracing failure and giving your teams permission to fail.

A good example of an EMEA based enterprise embracing this approach is Jaguar Land Rover. They have taken part in Digital Innovation Training to improve the different services they provide in their vehicles to customers. Recently Emirates NBD adopted this way of working to launch AI enabled banking to their retail customers. It was not a case of changing who they are, but rather a case of learning new ways of approaching problem solving.

 

What do you see as the future for cloud computing and AWS?

Cloud has become the business enabler and new normal as companies of every size are now deploying new applications to the cloud by default and looking to migrate as many of their existing applications as they can as quickly as possible. But it’s worth noting that we are just at the very start of that journey. AWS is a nearly $31 billion run rate business, but the worldwide IT services market is many orders of magnitude bigger than that. There’s still a long way to go in enabling customers to modernise their IT and build new and better applications in new and better ways.

There are a few areas that we’re particularly excited about for the future. For example, ML and AI. We believe that most applications over time will have some form of ML and AI infused in them. Today, if you look at AI usage, it’s still relatively early days. But virtually every enterprise and start-up is interested in it. IoT, Serverless, Edge, Containers and Analytics are also areas that we’re really focused on.

For example, we recently announced plans to build the Volkswagen Industrial Cloud, a cloud-based Industrial digital production platform that will transform their manufacturing and logistics processes. The Volkswagen Industrial Cloud will bring together real-time data from all of the Volkswagen Group’s 122 manufacturing plants to manage the overall effectiveness of assembly equipment, as well as track parts and vehicles. Volkswagen will use the suite of AWS technologies to detect, collect, organise, and run sophisticated analytics on data from the plant floor. Volkswagen will use AWS technology to glean insights that will pinpoint operational trends, improve forecasting, and streamline operations by identifying gaps in production and waste. They will also use ML technology to optimise the operation of machinery and equipment in all of its plants.