It is the largest provider of on-demand, cloud computing services in the world.
With 33% of a $150 billion global cloud market, AWS makes our digital lives possible.
Amazon Web Services (AWS) is a $54 billion behemoth.
It's bigger than Marriott, Netflix, and Twitter...combined.
Yet 99% of us don't actually understand the business.
THREAD: The story of AWS & lessons we can learn from it
It is the largest provider of on-demand, cloud computing services in the world.
With 33% of a $150 billion global cloud market, AWS makes our digital lives possible.
Here are some of its clients:
- Netflix
- Zoom
- Verizon Wireless
- Coinbase
- Vanguard
- https://t.co/Dqrc2Fvb9B
- Morning Brew
- GoPro
- Samsung
- Snap
- FanDuel
But how did it start?
Let's hop in our tweet thread time machine....
You're Jeff Bezos & your business is growing like a weed.
1999: $1.64 billion (revenue)
2000: $2.76 billion
2001: $3.12 billion
2002: $3.93 billion
2003: $5.26 billion
But you have a serious problem...
Employees are spending 70% of their time on tech infrastructure.
- Building servers
- Provisioning databases
- Scaling databases
Everything but focusing on Amazon's customers.
1) Help 3rd party retailers build their own web stores
2) Focus on faster customer innovation internally
3) Handle peak traffic during the holidays
Someone you can trust.
Enter Andy Jassy.
Yes, the same Andy Jassy who was named as Amazon's newest CEO on July 5, 2021.
His first job was in Marketing, working on the launch of Amazon Music.
His second job was as Jeff Bezos's Chief of Staff.
And his third job was to solve this tech headache plaguing the company.
The idea: take this tech mess & simplify it into a shared platform with 3 building blocks...
- Storage
- Computing
- Databases
Employees could now spend 70% of time serving customers vs. racking servers.
Good enough, where Jassy said something along the lines of...
"Hey we're pretty good at this IT thing. It was a pain in the ass for us & it's a pain in the ass for others. Why don't we make this a product?"
It was the first pay-as-you-go IT infrastructure, shepherding a new era of cloud computing.
Here's the OG announcement 👇
1) Fixed costs became variable costs
2) Economies of scale lowered costs
3) On-demand created flexibility & speed
4) You didn't have to maintain servers
5) Global reach & performance
If you go to https://t.co/safVVDRpI5, you’re seeing that homepage because of AWS.
Your computer is actually connecting to an AWS server via the internet.
And that server hosts https://t.co/safVVDRpI5 on behalf of Netflix.
First, Netflix is significantly more cost-efficient because of AWS.
Without AWS...
Netflix would purchase thousands of physical servers, pay for real estate to house them, and hire people to maintain them.
Let’s say Netflix projects 300mm customers in 2022.
It would have to buy enough servers to satisfy 300mm customers.
Let's say 2022 actuals are 250mm.
Netflix lit millions of $ on fire by predicting too much demand.
Rather than buy compute power or storage, you rent space from AWS based on your server needs today.
Now that you understand AWS, there are two final lessons we can learn from this business.
AWS was founded out of Amazon’s frustration with its own tech situation.
Everyone was spinning up resources (like servers) for each project versus scaling, sharing, and reusing servers.
https://t.co/Dqrc2Fvb9B was customer #1 for this service, a service that would end up becoming the operating system of the internet.
The business has massive fixed costs from owning and maintaining millions of servers.
As it attracts more customers, the economics get better & the moat gets bigger.
Step 2: as biz grows, spread massive costs across more customers
Step 3: as per customer costs decrease, lower price of AWS for customers
Step 4: as price of AWS decreases, competitors put in shitty spot
Step 5: world domination
We made it!
If you enjoyed this thread & want more business breakdowns, follow @businessbarista!
Listen to the story of Andy Jassy (Amazon's new CEO): https://t.co/2ZmjB1g1tw
Listen to a full breakdown of AWS: https://t.co/LnTfH5xEMa
More from Alex Lieberman ☕️
Introducing "The Balloon Effect"
Many businesses & creators have experienced a similar pattern of success.
From @MrBeastYT and @MorningBrew to @oatly and @Rovio.
Let's break down what "The Balloon Effect" is and examples of it in real life.
Keep reading 👇
1/ What is "The Balloon Effect"?
It is a particular pattern of growth.
It is not Instagram's growth trajectory.
It is not https://t.co/5axsTUKek6's growth trajectory.
"The Balloon Effect" is defined by several years of hard work & grit complemented by slow, linear growth.
2/ And then one day, one month, or one quarter...everything changes.
A business hits a tipping point and its trajectory shifts entirely.
Gradual growth turns to exponential growth & your brand and your size explode.
Like a step function.
3/ Now, you're probably wondering.
Why is it called "The Balloon Effect"?
Because filling/popping a water balloon follows the exact pattern I just described (and so many businesses experience).
Long unsexy slog 👉 Exponential tipping point.
4/ Initially, you turn on the faucet & water takes up space in the empty balloon.
Through effort you open the faucet, yet the results are unexciting.
But it's what must be done for water (or growth) to happen at all.
It's not sexy, but it's necessary.
Many businesses & creators have experienced a similar pattern of success.
From @MrBeastYT and @MorningBrew to @oatly and @Rovio.
Let's break down what "The Balloon Effect" is and examples of it in real life.
Keep reading 👇
1/ What is "The Balloon Effect"?
It is a particular pattern of growth.
It is not Instagram's growth trajectory.
It is not https://t.co/5axsTUKek6's growth trajectory.
"The Balloon Effect" is defined by several years of hard work & grit complemented by slow, linear growth.
2/ And then one day, one month, or one quarter...everything changes.
A business hits a tipping point and its trajectory shifts entirely.
Gradual growth turns to exponential growth & your brand and your size explode.
Like a step function.
3/ Now, you're probably wondering.
Why is it called "The Balloon Effect"?
Because filling/popping a water balloon follows the exact pattern I just described (and so many businesses experience).
Long unsexy slog 👉 Exponential tipping point.
4/ Initially, you turn on the faucet & water takes up space in the empty balloon.
Through effort you open the faucet, yet the results are unexciting.
But it's what must be done for water (or growth) to happen at all.
It's not sexy, but it's necessary.
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https://t.co/PwiRIL3v9x
Some random interesting tidbits:
1) Zuck approves shutting down platform API access for Twitter's when Vine is released #competition
2) Facebook engineered ways to access user's call history w/o alerting users:
Team considered access to call history considered 'high PR risk' but 'growth team will charge ahead'. @Facebook created upgrade path to access data w/o subjecting users to Android permissions dialogue.
3) The above also confirms @kashhill and other's suspicion that call history was used to improve PYMK (People You May Know) suggestions and newsfeed rankings.
4) Docs also shed more light into @dseetharaman's story on @Facebook monitoring users' @Onavo VPN activity to determine what competitors to mimic or acquire in 2013.
https://t.co/PwiRIL3v9x
