Andy Jassy's remarks on Amazon's innovation and weighing in on product failure
After Jeff Bezos stepped down, Andy Jassy became the CEO of Amazon and its cloud business. Jassy has been with Amazon for 25 years, and the role fits him perfectly.
Jassy handled the pandemic time business with the utmost care, and the company saw tremendous success. Taking the right decision at the right time made Amazon Web Services (AWS) the unprecedented leader in the cloud. In the first-ever annual shareholder letter, CEO Andy Jassy gave out crucial insights about the business he runs.
Jassy said, "If you invent a lot, you will fail more often than you wish. Nobody likes this part, but it comes with the territory," Andy Jassy's remarks taken from a business perspective give us insights on running current generation cloud business and eCommerce giant. As we mentioned before, AWS spectated tremendous growth every year, making the shares lucrative options for investors. But investors should not jump ship because the company can make them a ton of money. They have to "brace" for failure too.
Amazon indeed wrote many narratives about the business they are involved in. during the pandemic, when cloud business started to gain massive attention, Amazon's business model was further magnified by everyone. People were stuck long days in their homes, and running businesses became tricky. Amazon kept its services running and provided physical aid such as PPE, clothing, food, and various items to help its employees. With the rapid shift of technology, the AWS board managed to keep their decisions straight for the people. In return, it helped millions of companies to pass the difficult times with ease. But that can't always be the same.
Jassy gave insights on the company revenue portfolio too. Let us reflect on what we have learned so far. At the pandemic's start, AWS revenue had a 30 per cent growth year-over-year (YoY) in 2022. It translates to $35 billion in revenue in the 2019 business year. In 2020, customers growing numbers did not slow down. NA and international consumer revenue grew 39 per cent, which translates to $245 billion. In 2021 Q1, it had another 41 per cent growth.
Jassy made sarcastic remarks about people's thinking. He said, "people often assume that the game-changing invention they admire pops out of somebody's head, the light bulb goes off, a team executes that idea, and presto- you have an innovation that's a breakaway success for a long time. That's rarely, if ever, how it happens."
While it truly reflects the idea of how general people think and what the actual scenario is. A significant number of seed investing funds goes toward innovation, trying to bring out a new product that people may need, raise it under the company banner and give it shade. If successful, yet another fantastic product is born. It may increase or decrease the parent company's share prices as the product can both be embraced or hated by many.
Currently, AWS is working backwards on the services customer asked for. A line has been drawn between AWSs functionality in V1. Elastic Compute Cloud (EC2) is another core product on which the team is working to futureproof. In the early days, when people asked: "why compute wouldn't just be an indifferent commodity." They now have the answer right in front of them. Storage, high-performance computing, memory, graphics rendering, machine learning (ML), artificial intelligence (AI), and multiple factors run simultaneously.
In 2006, when Amazon launched a prime video as Amazon Unbox, it streamed over 5,000 movies in 2011. It takes a lot of courage, funding, effort and capability. The platform may have some short-lived shows, but the adopted business model timely helped it survive. The company is moving toward a carbon-neutral workflow, "The Climate Pledge." It may affect a large part of Amazon's organisation in business for the better. Affordable housing communities to powering 100 per cent of the company with renewable energy needs a lot to weigh in.