Jeff Bezos’ bet that Wall Street frowned upon 16 years ago

In 2006, Jeff Bezos made a “long shot” that Wall Street frowned upon. The founder of Amazon, the most famous online buying and selling site on the Internet, wanted to make the leap to cloud computing and offer it as a service. Despite the fact that the financial world preferred that he continue selling books online, Bezos recalled this week why it was a wise decision: “The long shot generated 62 billion dollars last year,” he tweeted in reference to Amazon Web Services.

The world of cloud computing, the so-called “cloud”, is not just a place where we can store our photos or documents online. In recent years, this area of ​​computing has become a Leviathan that stores much of what we do on the Internet: from a bank transaction to watching a movie on Netflix.

“The term ‘cloud computing’ refers to the delivery of computing resources on demand over the Internet at pay-per-use pricing. Instead of buying, owning, and maintaining their own data centers and servers, organizations can purchase technologies such as storage, databases and other services based on their needs and when they have peaks in demand. For governments, for example, this happens with censuses or elections,” he explains to Clarion Andrés Tahta, General Director of the Public Sector for Latin America of AWS.


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Francesc Peiron

Now, this was not so clear in 2006, when Bezos got involved in the decisions of AWS with Andy Jassy, ​​then head of the division and now, the CEO of Amazon after the departure of Bezos. As Brad Stone recalls in his book amazonunbound, When he floated the idea of ​​selling his servers’ processing power so that anyone could buy space in his cloud, no one really understood what Bezos might know about the business. In his head, everything was already clear: the long term. A constant in his way of understanding the entire Amazon ecosystem.

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Andy Jassy, ​​current CEO of Amazon

DPA via Europa Press / EP

It made sense: the impressive volume of sales that Amazon handled on its website e-commerce rested on an infrastructure that could withstand even the worst of black friday. Something else could be done with it: and that is what Wall Street still did not see.

Even as companies began to do their annual balance sheets, Bezos decided to put Amazon Web Services revenue under the “other” category. Why? In order not to “let cool” the novelty of your idea. Today, AWS is the service with the most growth potential in the company. And that infinity seems to be unfolding year after year.

The numbers of the phenomenon

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aws

Chris Helgren / Reuters

Databases, management tools, security, IoT, business applications and developer tools are some of the services that can be contracted online. But what is all this for? Although it all sounds a bit abstract, it is much more concrete than it seems: they are huge computers (servers), with immense processing capacity, connected to each other, somewhere in the world -generally the locations are secret- to support a much of the internet.


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The vanguard

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To put this in context, and in line with the previous example, when we watch a movie on Netflix, that movie is hosted on some computer. It is this service that the big companies use: instead of having them in their own equipment, they hire the giants that are dedicated to providing this storage and processing power. But over time, this type of technology evolved into other intensive and business uses, which are key to the Internet we use today.

The cloud computing is dominated in the world by four companies: AWS, which has the largest share of the market (49.2%), Microsoft Azure (33.1%), Alibaba (8.7%) and Google Cloud (9.1%). To measure the size of AWS, until June of last year the company offered 17,300 different products and services to companies and individuals, within which about 5,000 belong to the “infrastructure and software” category.

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Alibaba

GREG BAKER / AFP

So vast is the amount of things that can be done with cloud computing that, three weeks ago, the company began to offer a service for generating random numbers based on quantum computing, developed by the Quantum Numbers (AQN) project of the Australian National University.

“For more than 12 years, we have provided our cloud services to millions of active customers every month and more than 100,000 partners in more than 150 countries worldwide from virtually all industries and of all sizes, including start-ups, large multinational companies and public sector organisations,” explains Tahta.


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Blanca Gispert

Amazon offices in the 22@ district of Barcelona

Based on the challenges that this enormous infrastructure poses, Amazon Web Services (AWS), the division of the company founded by Jeff Bezos, holds a summit every year in which it discusses the new developments of this system, as robust as it is complex.

The AWS Congress in Washington

Adam Selispky, CEO of Amazon Web Services (AWS)

Adam Selispky, CEO of Amazon Web Services (AWS)

David Paul Morris/Bloomberg

In this context, this Monday begins one of the AWS Summits in Washington, a conference in which there will be talks on various topics of the cloud computingbut also artificial intelligence, on how to apply these services to avoid natural catastrophes and the risks and precautions that must be taken in terms of cybersecurity.

It will be from May 23 to 25 and will feature experts in the field, workshops and conferences. “This is an invitation for the public to learn how the AWS cloud can digitally transform the different organizations in the public sector, so that they can innovate and thus offer better services to their customers and citizens. The news will also be presented in matters of cybersecurity, artificial intelligence, cloud storage, internet of things and big dataamong other things,” explains Tahta.

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Andy Jassy giving a talk at the AWS Summits

Third parties

According to his experience, the summit is aimed at “programmers, developers, specialized journalists and those interested in artificial intelligence, machine learning and data analysis.

Thus, that business that Bezos saw in 2006 ended up generating, not only a new division of a giant like Amazon, but also a field of knowledge that continues to grow year after year.

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