 I'm with wikibon.org and this is Silicon Angles, The Cube, where we extract the signal from the noise, we go into the events, we bring you the best guests that we can find, and we're here at the AWS Summit. Amazon is taking the cloud world by storm. Amazon invented the cloud in 2006. They've popularized it. Very popular, of course, with developers. Everybody knows that story. Amazon appealing to the web startups. But what's most impressive is the degree to which Amazon is beginning to enter the enterprise markets. I'm here with my co-host, Jeff Frick. And Jeff, we heard Andy Jassy this morning just laying out the sort of marketing messaging and progress and strategies of AWS. One of the things that was most impressive was the pace at which they put forth innovations. We talked about that earlier, but also the pace at which they proactively reduce prices. That's different than what you'd see in the normal sort of enterprise space. Talk about that a little bit. Yeah, again, I think it really speaks to their strategy to lock up the customer. It's really a lifetime value of the customer and making sure that they don't have really an opportunity or a reason to go anywhere else. So, as we discussed a little bit earlier, they leverage kind of the pure hardware economics of decreasing computing power, decreasing storage, decreasing bandwidth. But then they also get all the benefits of scale. And I think one of the interesting things that Andy talked about in kind of his six key messages was that it's actually cheaper to rent from them because of the scale than it is to buy yourself. And I know that's a pretty common knock between kind of a build or buy kind of process you go through and usually you would think renting at some scale becomes less economical than if you just did it yourself. But because their scale is so massive, because of the flexibility that you can bring computing resources to bear based on what you're trying to accomplish really kind of breaks down the old age old thought that at scale we need to do it ourselves. Well, that's the premise. I think, let's break down a little bit about that. That analysis and Andy's keynote. So he put forth some data from IDC which showed that the Amazon cloud is cheaper than a so-called private cloud or an in-house on-premise installation. Certainly it depends, right? It really depends on the workload. There's somewhat of an apples to oranges going on here. The types of workloads that are going down in the AWS cloud, granted, he's right in that they're running Oracle, they're running SAP, but the real mission critical workloads, what he calls mission critical aren't the same as what city would call mission critical. So to replicate that level of mission criticality would probably and almost most certainly be more expensive rental versus zoning. The real Achilles heel of any cloud, not just Amazon cloud, really is getting data out, moving data, Amazon's going to charge you, not to get data in, they're going to charge you to store it there, to exercise, you know, compute, and then, but they're also going to charge you if you want to take it out. That's expensive, the bandwidth costs and the extrication cost are expensive. The other issue with cloud again is data movement. It takes a long time to move a terabyte, let alone multiple terabytes. So those are sort of the two sort of Achilles heels of cloud, but that's not specific to Amazon's cloud, that's any cloud. So we've got a great lineup today. Let's see, we've got Ariel Kelman coming on, and I believe he's in the house. So we're going to take a quick break right now. We'll be right back with Ariel Kelman, who's the head of marketing at AWS. Keep it right there, this is theCUBE, right back. We looked at all the programs out there and identified a gap in tech news coverage. Those shows are just the tip of the iceberg and we're here for the deep dive. The market begged for our program to fill that void. We're not just touting off headlines, we also want to analyze the big picture and ask the questions that no one else is asking. We work with analysts who know the industry from the inside out. So what do you think was the source of this missing? So you mentioned briefly, if that's the case, then why does the world need another software? We're creating a fundamental change in news coverage, laying the foundation and setting the standard. And this is just the beginning. We looked at all the programs out there and identified a gap in tech news coverage. There are plenty of tech shows that provide new gadgets and talk about the latest in gaming, but those shows are just the tip of the iceberg and we're here for the deep dive. Hey Volante, I'm with wikibon.org and this is Silicon Angles theCUBE where we extract the signal from the noise and we bring you the best guests that we can find. We go into events like ESPN goes into sporting events, we go into tech events, we find the tech athletes and bring to you their knowledge and share with you our community. We're here at Moscone in San Francisco at the AWS summit. We're here with Ariel Kelman, who's the head worldwide marketing for AWS. Ariel, welcome to theCUBE. Thanks for having me, Dave. Yeah, our pleasure. I really appreciate you guys having us here. Great venue. Let's see, what's the numbers? It looks like many, many thousands, well over 5,000 people here. Yeah, we should have four or 5,000 people here. We're doing about a dozen of these around the world, one to 4,000 people to help educate our customers about all the new things we're doing, all the new partners that are available to help them thrive in the AWS cloud. Yeah, it's mind boggling the amount of stuff that you guys are doing. We just heard Andy Jassy's keynote. For those of you who saw Andy's keynote at Reinvent, a lot of similar themes with some new stuff in there, but one of the most impressive, he said, other than security, one of the things we're most proud of is the pace at which we introduce new services. And he talked about this flywheel effect. Can you talk about that a little bit? Sure, there's kind of two different things going on. The pace of innovation is we're really trying to be nimble and customer centric, and ultimately we're trying to give our customers a complete set of services to run virtually any workload in the cloud. So you see us expanding broader with additional services, and then as we get feedback, we add more and more features. Yeah, so we're obviously seeing a big enterprise push. Andy was very, I thought, politically correct. He said, look, there's one model, which is to keep charging people as much as you possibly can, and then there's our model, which is we proactively cut prices, and we pass that on to customers. And he also stressed that that's not a gimmick, it's not a sort of a one-time thing. Can you talk about that in terms of your philosophy and your DNA? It's just our philosophy. It's actually a lot less dramatic than is often portrayed in the press. Just the way we look at things is we're constantly trying to drive efficiencies out of our operations, and as we lower our cost structure, we have a choice. We can either pocket those savings as extra margin, or we can pass those savings along to our customers in the form of lower prices, and we feel that the latter is the approach that customers like, and we want to make our customers happy. So this event, we were talking off camera, you said you've been doing these now for about two years. You do re-invent once a year. That's your big conference out in Vegas, and it's a very large event, very well attended, and you do these regionally and around the world, right? Talk about that a little bit. So we do about a dozen of these a year. We did New York a couple of weeks ago, London, Australia, and Sydney. I'm going to go to India and Tokyo, really about a dozen cities in the world, and it's a little tech, I'm not going to beat all of them, but the focus is to really deliver educational content. We'll do about maybe 12 to 16 technical breakout sessions all for free for customers and people who want to learn about AWS for the first time. And the audience here is largely practitioners and partners, right? Can you talk about the makeup a little bit? Sure, it's a pretty diverse set of people. We have technical executives like CIOs and architects, and we have lots of developers, and then lots of people from our partner ecosystem of integrators wanting to brush up on the latest technologies and skills, and a lot of people who just want to learn about the cloud and learn about AWS. Ariel, I think there are a lot of misconceptions about AWS, and I'd like to just tackle some of those with you if I may. So let me just sort of list them off, and you can respond, we'll let our audience sort of decide. So the first is that AWS is only Test and Dev workloads. Can you talk about that a little bit? Sure, well Test and Dev workloads are very popular. We saw, we covered that in the keynote, and it's often a place where IT organizations will start out with AWS, but it is by no means the most popular or most dominant workload. We have a lot of people migrating enterprise apps to the cloud. If you look at, in New York, in our summit, we talked about Bristol Myers Squibb running all of their clinical trial simulations and reducing the amount of time it takes to run a simulation by 98%. You have people running Oracle, SharePoint, SAP, pretty much any workload in the cloud, and then another popular use is building brand new applications for the cloud. You can miss some people call them cloud native applications. A good example is The Washington Post, who built an app called The Social Reader that delivers their content to Facebook and now has more people viewing their content there than with their print magazines. And they just couldn't have done that on premises. So the other one I want to talk about, we're going to do some serious double clicking on security so we don't have to go crazy on it, but there's a sort of common perception that the cloud is not secure. What do you guys say about that? Yeah, so really our number one priority is security. We could look at it as security, operational performance, and then our pace of innovation, but with security, what we want to do is to give enterprises everything they need to understand how our security works and to evaluate it and how it meets with their requirements for their projects. So it really all starts with our physical security, our network security, the access of our people. They're all the similar types of technologies that our customers are familiar with. And then they also tend to look at all the certifications and accreditations, SAS 70 type two, SOC one, SIST trust, ITAR for our government customers. And then I think something a lot of people don't understand is how much work we've put into the security features. It's not just, is the cloud secure, but can I interact and integrate your security functionality with all my existing systems so we can integrate with people's identity and access systems. You can have a private dedicated connection from your enterprise to AWS with Direct Connect. So I really encourage anyone who has interest in digging into our security features to go to the security center on our website. It's got tons of information. So I'm going to put you on the spot. What percent of data centers in the world have security that is as good or better than AWS? It'd be an interesting thing for us to do a survey on. But if you think about security at the infrastructure layer down is what we take care of. Now when you build your application, you can build a secure app or non secure app. So the customer has some responsibility there. But in terms of that cloud infrastructure, for a vast majority of our customers, they're getting a pretty substantial upgrade in their security. And here's something to think about is that we run a multi-tenant service. So we have lots and lots of customers sharing that infrastructure. And we get feedback from some of the most security conscious companies in the world and government agencies. So when our customers are giving us an enhancement request, and let's say it is an oil company like Shell or a financial services company like NASDAQ, and we implement that improvement because there's always new requirements. We implement that. All of our hundreds of thousands of customers get those improvements. So it's very hard for a lot of companies to match that internally to stay up to speed with all the latest requirements that people need. Yeah, okay. So you touched on this as well as the compliance piece of it. But when you think of things like HIPAA compliance, for example, I think a lot of people don't realize that you guys are a leader in that regard. Can you talk about that a little bit more? Yeah, so we have a lot of customers running HIPAA compliant workloads. There's one company, the Schumacher Group, which does emergency room staffing out of Lafayette, Louisiana. And when companies like that are going through the process, they have to follow their internal compliance guidelines for implementing a HIPAA compliant app. It's actually, it's more about how you implement and manage the application than the infrastructure, which is part of it, but we satisfy that for our customers. Let's talk a little bit about SLAs. That didn't come up at least today in Andy's keynote, but it did it reinvent. And he made a statement at reinvent. He said, we've never lost a piece of business because of SLAs. And that caught my attention. And I said, okay, interesting. Talk about the criticisms of the SLA. So a lot of people say, well, the SLA, not just of Amazon's cloud, but any public cloud. I mean, SLAs are really in essence an indication of the risk that you're able to take and willing to take. What do your customers tell you about SLAs? The first thing is we don't hear a lot of questions about SLAs from our customers. Some customers, it's very important that we have SLAs for most of our services. But what they're usually judging us on is the operational track record. That we provide and doing testing and seeing how we operate and how we perform. And we had an analyst from IDC recently do a survey of a bunch of our customers and they found that on average, the average app that runs on AWS had 80% less downtime than similar apps that are running on premises. So we have a lot of anecdotal evidence to suggest that our customers are seeing a reliability improvement by migrating their apps to AWS. So you're saying don't judge us on the paper. Judge us on our actual activities in production and in the field. But typically what most of our customers are asking for is they want to dig into the actual operational features and track record. Now the other thing I want to address is the so-called exit tax, right? Don't charge to get my data in there. I keep my data in there. You charge me for storing it, for exercising compute activity, but it's expensive to get it out. How do you address that criticism? Well our pricing is different for every service and we really model it around our customers to really satisfy a broad set of use cases. So one example I think you may be talking about is with Amazon Glacier, our archive service, which is one penny per gigabyte per month. And for an archive service, we figure that most people want to keep their data in there for a long period of time so that we want to make it as cheap as possible for people to put it in. And if you actually needed to pull it out, the reason is because you may have had some disaster or you accidentally deleted something and that you're going to be retrieving data on a far less frequent basis. So on an overall basis, for most customers, it makes sense. Now what we could have done is made the retrieval costs lower and then made the storage costs higher, but the feedback we got from customers is, you know, for archiving, a majority of customers may never even retrieve that data at all. So it would end up being cheaper for a vast majority of our customers. Yeah, I mean that's the point of Glacier. If you put it there, you kind of hope you never have to go back and get it. The other thing I wanted to ask you about is some of the innovations that we've seen, you know, lately in the industry, like Redshift, right, the data warehouse. You mentioned Glacier. It was interesting Andy said that Glacier is the fastest growing service in terms of customers. Redshift was the fastest growing service, I guess overall in AWS. So Redshift is an interesting move for you guys. That whole big data and analytics space. I wonder if you could talk about that a little bit. Well, I mean, if you talk to IT executives in the enterprise and even startups now that have to analyze lots of data, building a big data warehouse is one of the just best examples of how much the pain of hardware and software infrastructure gets in the way of people. And there's also a gatekeeping aspect to it. If you're working at a big company and you want to run, you have a question, a hypothesis, you want to run queries against terabytes and petabytes of data, you pretty often have to go and ask for permission. Can I borrow some time from the data warehouse? No, no, no, you're not as important. What are customers doing? They go, hey, I'm going to go load the data, load a petabyte of data, run a bunch of analysis and shut it down and only pay for a few hours. So it's not just about making it cheaper. It's about making use of technology possible where it was just not possible and feasible and cost prohibitive before. Yeah, so that's an important point. I mean, it's not, it's not just about sort of moving workloads to the cloud. You know, the old saying, my mess for less. It's about enabling new business processes and new procedures and deeper business integration. Can you talk about that a little bit more? Add a little color to that notion of adding value beyond just moving workloads out of on-premise into the cloud to cut costs, cut off X, but enabling new business capabilities. When you remove the infrastructure burden between your ideas and what you want to do, you enable new things to be possible. I think innovation is a big aspect of this where if you think about, if you reduce the cost of failure for technology projects so much that approaches zero, you change the whole risk taking culture in a company and more people can try out new ideas and companies can green light more ideas because if they fail, it doesn't cost you that much. You haven't built up all this infrastructure. So if you have more ideas that are cultivated, you end up with more innovation whereas before people are too afraid to try new things. So I'm a reader of Jeffrey's annual letters. I think they're great. They're Warren Buffett-like in that regard. One of the things he emphasizes this year was the customer focus. You guys are a customer focused organization, not a competitive focused organization. And again, you got to recognize that both models can work. Can you talk about that a little bit just in terms of the culture? Yeah, I mean, it starts out with how we build our products. Anyone who has a new idea for a product, first thing they got to do is write the press release. So what are customers going to see? Is it valuable to them? And then we get products out quickly and then we iterate with customers. We don't spend five years building the first version of something. We get it out quickly. Sort of the lean start up, if you heard of the minimum viable product approach, get it out there, get feedback from customers and iterate. We don't spend a lot of time looking at what our competitors are doing because they're not the ones that pay our bill. They're not the ones that can hire and fire us. It's the customers. So, Ariel, you've seen this thing come, you know, quite a ways. I mean, you were at Salesforce, right? Which I guess started all in 99, you know, if you could tell that. Look at that as the modern cloud sort of movement. It wasn't called cloud. And then you guys in 2006 actually announced what we now know is, you know, the cloud. Where are we in terms of, you know, the cloud? You know, what inning is it to use the sports and the halogen? I don't know what inning is it, but you know, it's an amazing time where there's such a massive amount of momentum, of adoption of the cloud from every type of company, every type of government agency. But yet still, when you look at the percentage of IT spend or you go talk to a large company and you say, even with all these projects, what percentage of your total projects, there's still tremendous growth ahead of us. Yeah, so there's always that conversation about the pie chart, 70% of our effort is spent on keeping the lights on, 30% is spent on innovation. And I don't know where that number came from, but I think generally anecdotally, it feels about right. Talk about that shift. I mean, if you talk to any CIO, they don't like the idea of having 80% of their staff and budget being focused on keeping the lights on in the infrastructure. What they'd like to do is to really shift the mix of what people are working on within their organization. It's not about getting rid of IT. It's about giving IT better tools so that every ounce of effort they're doing is geared towards delivering things to the business. And that's what gets CIOs excited about the cloud, is really shifting that and having a majority of their people building and iterating with their end users and with their customers. So we talked about the competition a little bit. I want to ask you a question in general terms. You guys have laid out sort of a playbook and there's a lot more coming, we know that. But you know this industry quite well. You know it's very competitive. People see what leaders are doing and they all sort of go after it. Why do you feel confident that AWS will be able to maintain its lead and can it even extend its lead and why? There's a couple things that we sort of suggest for customers to look at. I think first of all is the track record and experience. When you're looking at a cloud provider, have they been in this business for a long time? Do they have a services mentality where they've had customers trust them for applications that really they trust their business on? And then I think secondly, is there a commitment to innovation? Is there a pace of new features and new technologies as requirements change? And I think the other piece that our customers really give us a lot of feedback on is that they can count on us lowering prices. They can count on a real partnership. As we get better at this and we're always learning, as we get better and we reduce our cost structure, they're going to get to benefit and lower their costs as well. So I think those are kind of the big things. The other thing is the customer ecosystem I think is a big part of it where you know this is technology. People need advice, they need best practices, they often need help. And you know kind of analogy I make is if I have a problem with my phone, I can probably close my eyes and throw it, and I'm going to hit someone who also has an iPhone, I can ask them for help. Well, if you're a startup in San Francisco or London or if you're an enterprise in New York or Sydney, odds are that your colleagues, if they're doing cloud, they're doing it with AWS and you have a lot of people to help you out, a lot of people to share best practices with. That's a subtle but important point as industry participants begin to aggregate within your cloud, there's a data angle there, because there's data that potentially those organizations could share if they so choose to that is a value. And as you say, the best practice sharing as well. I have two last questions for you. First is, what gets you excited in this whole field? I think it's like seeing what customers are doing. I mean that's the cool thing about offering cloud infrastructure is that anything is possible. Like when we met Ryan who spoke from Atomic Fiction, these guys are the world's first digital effects agency that's 100% in the cloud and to see that they made a movie and all the effects like the Robert Semeckis flight film without owning a single server. It's just, it's amazing to see what these guys can do, how happy they are to have a group of 30, 40 artists that can say yes when the director says I want it to do differently. I want to go from 150 to 300 shots and to see how happy and excited they are. I mean, that's what motivates me. Yeah, okay. And then my last question, Ariel, is what keeps you up at night? What worries you? Well, I think the most important thing that we can't forget is to really keep our fingers on the pulse of the customers and what they want and also helping them to figure out what they want next. Because if we don't keep moving, then we're not going to keep pace with what the customers want to use the cloud for. All right, Ariel, Kellman, thanks very much. Congratulations on the amazing progress. Oh, sure, thanks a lot. And we'll be watching and really appreciate again you having us here. Appreciate your time coming on. Good luck with the rest of the tour. Hope you don't have to do every city. It sounds like you don't, but it sounds like you enjoy them. So congratulations again. All right, this is Dave Vellante. Keep it right there. This is theCUBE. We'll be back with our next guest right after this work. We looked at all the programs out there and identified a gap in tech news coverage. There are plenty of tech shows that provide new gadgets and talk about the latest in gaming, but those shows are just the tip of the iceberg and we're here for the deep dive. There's a difference between technology consumers and those who live the business day today. And our viewers recognize that. The market begged for a program to fill that void. We're not just touting off headlines. Our goal is to provide you with a story, but we also...