Amazon has begun laying off about 10,000 employees, but the tech and e-commerce giant’s pain hasn’t been spread evenly. The company’s best-performing and least-known business has seen few, if any, job cuts. Amazon Web Services, which sells cloud computing services to millions of organizations and individuals around the world, could hit his 74% share of Amazon’s operating profit in 2021 and surpass it in 2022. there is. A senior AWS executive recently told Bloomberg:
With total revenue of $62.2 billion last year, AWS is ahead even in this year’s economic downturn, growing revenue 32% in the first three quarters (an increase of $14.3 billion). While the sector’s growth didn’t quite meet analysts’ expectations in the third quarter, its projected revenue for 2022 is around $80 billion.
As this locomotive continues to overtake the economy and the rest of Amazon, and Wall Street analysts expect it to continue, CEO Adam Selipsky will inevitably get more attention. He’s already famous in the tech world, but not much else. His predecessor, Andy Jassy, will become his AWS chief executive in 2021 when Andy Jassy succeeds Jeff Bezos as his CEO at Amazon.
Selipsky has had a somewhat winding journey to the top of AWS. Technology was not a big part of his education. He grew up in Seattle and attended an elite Lakeside School (most famous alumni: Bill Gates) before attending Harvard University, where he majored in government studies, like Jassy, and Harvard Business School where he completed his MBA. Got. Later, he worked for Mercer Management Consulting and Seattle-based He RealNetworks software company.
Selipsky started working at AWS in 2005, one year before launching its first storage service. He built the marketing, sales, and support teams for AWS and created the team that built the first user interfaces for AWS. After 11 years of helping him manage the booming business, he accepted an offer to become his CEO of Seattle software company Tableau. Salesforce acquired Tableau in 2019. Then, when Amazon announced that his Jassy would replace Bezos in his 2021 year, Selipsky was approached as he would return to AWS as the successor.
luck We recently sat down with 56-year-old Selipsky to talk about the culture that has made AWS dominant, how he picks team members, unplanned career progression, and how everyone is in a position to make good things happen.
This interview has been edited and condensed for clarity.
on wAWS Differences:
We have a very long-term view. We believe it can take years to create something of deep value and scale that works for your customers and works as a business. It works in a very short period of time. Amazon has always taken a long-term view (we’re talking about a 10- or 20-year vision) and AWS is a great example. We knew it would take years, even if executed perfectly, for AWS to become a large business and grow into the long-term economics we believed were there.
At Amazon, “customer obsession” means:
Everyone says it’s customer-focused. There is talk, but most companies don’t do it in a deeply meaningful way.
There are two things about Amazon and our commitment to our customers. The first is the ability to deeply understand what your customers want and where they are going, with a level of depth and fidelity that few companies can achieve. This turns out to be the easier of the two steps.
The second, more cultural, is to keep the customer’s point of view in making the most important decisions. For some companies, customer-centricity can mean focusing on the customer until it becomes an inconvenience, and then focusing on the company. When it comes to pricing discussions, it quickly becomes, “What does that mean for margins this quarter or this year?” At Amazon, I think we’ve done a great job of putting the customer’s point of view at the center of our discussions when making the most important decisions. And it is unusual.
Our relationship with our customers is what sets us apart. Our customers say we act differently than other companies. You don’t come to them at the end of the quarter with a special discount on that hot summer day.
How he chooses his team members:
We are obsessed with how we allow you to continue to innovate, and it starts with who you hire. We often talk about hiring builders instead of managers. And it’s not a common concept. Look for personality traits, such as someone who is restless and dissatisfied. If you’re not happy with what’s around you, you usually don’t have to reinvent something. Also, curiosity — if you’re not curious about how something works, you’re unlikely to figure out a better way for it to work.
We are people who want to fulfill a mission, who are restless and dissatisfied with what they see around them, who are curious about how the world works and how it works. We then try to create an environment where builders can build freely. We try to get the constraints out of their way and remove as many dependencies from them as possible.
Why AWS rejects the concept of traditional corporate strategy:
A large part of AWS’ success has been driven by our belief that we must listen intently and respond quickly to our customers. If you’re using a top-down planning model, it’s probably slow and probably out of line with the customer story of the day. We truly believe speed matters.
And speed is a choice. Some companies believe that speed is somehow predetermined. You’ll hear customers say, ‘We’re not that fast’ or ‘That’s not who we are’. Like a given gravity. But speed is a choice. We always discuss with our clients in a very detailed manner the choices they make, how they organize, the technology they use and the leadership principles they emphasize. These directly affect the speed of movement as an organization. .
It is really important that we practice what we preach. Speed is also important to us.
Unconventional early decisions that helped launch AWS:
In the early days of AWS, we made some important fundamental decisions. One was to offer our customers a very low price.
There are many examples of technologies that sell at high prices, and as the unit price goes down over time, so does the price. We decided that we were not going to penalize our customers for lack of scale. We intended to price these services as if they were already successful, but we knew they could be. We knew that if we continued to build well, the economy of the Internet would rapidly decline.
Showing customers that they can take advantage of these powerful features at a much more attractive price than they have been paying in the past was critical. The same goes for making these services pay-as-you-go. You can dramatically burst or shrink capacity as needed. No long-term contracts or commitments required. This gave developers complete flexibility to scale their business up and down as needed.
How AWS avoids stagnation:
For me, it’s the concept of rebels versus incumbents. One of the things we are always and willfully worried about is that we will continue to act as rebels and not become incumbents. We must continue to have a sense of urgency that we must always dance in front of our customers’ needs.
What tends to happen in large companies is that bureaucracy is rampant, asking, “How do we keep doing what we’re doing? How do we protect our revenue streams? How do we protect our margins?” Time and again, companies don’t understand that if you don’t want to cannibalize yourself, someone will gladly come and cannibalize for you.
We must maintain the same mentality as rebels still hungry to deliver on their promises to their customers. I would never say this in my heart. It’s about our source of income. We have built a bureaucracy to service that revenue and profit structure. ” This is the lesson that we strive to remember every day.
Selipsky’s advice for young people:
I grew up with people who knew I was going to be an orthopedic surgeon from the age of 12. I agree more with putting myself in a position where good things can happen.
The best analogy is to think of atoms in a chamber. Nothing can be said about what happens to individual atoms. It’s random and chaotic. But with the right size chamber and the right heat and right pressure, you can absolutely guarantee that atoms will collide and produce molecules, but you never know which molecules will occur and when. , you know it happens.
I encourage young people to put you in and make their own room. Make sure you have the skills, the passion, and the right people to be around you. Even if we can’t predict what good things will happen and when, we do know that on average, given enough time, good things, and hopefully fun things, will happen.