 Okay, welcome back, everyone, we're here live in San Francisco for Amazon Web Services Summit, AWS Summit, that's the hashtag. Go on Twitter, go to crowdchat.net slash AWS Summit. We're holding a special crowd chat, documenting the conversation, recording every tweet in that room, join that community. I'm John Furrier, the founder of Silicon Angle. This is theCUBE, our flagship program. We go out to the events and extract the signal from the noise. I'm joined by co-host Jeff Frick, filling in for Dave Vellante. Jeff, always hard to fill in for Dave Vellante. Who's the re-inventor? You got the tie on though for Dave. You got the tie for Dave. Doesn't look good on you. I know you're from California. And Ariel Kelman, worldwide marketing lead, head of worldwide market of Amazon. Welcome back to theCUBE. Yep, thanks for having me. You were here last time at re-invent. Kind of markets itself, the company, right? I mean, you just trot the features out there on stage and keep on pushing new code. Yeah, what we try and do is just lean back and just like, customers testimonials, let me come on. Yeah, but we try and just focusing on educating our customers about what our services are doing, how customers are using them, which is something they ask for a lot. And then go pretty light on the marketing. Most technical people don't like to be marketed to and they find our approach correct and refreshing. And when you're in the lead, you don't need to really worry about too much flair. You got some meat on the bone. You got great use cases, you got great technology and a market lead in cloud. And you're forging in a new territory. So there is a new element of the enterprise now coming in where you guys are being attacked, certainly in the market. Google had some moves this week. I see IBM's doing HB, Oracle, the list goes on and on. So okay, those guys are kind of putting up the C wall for the big innovation way that you guys have built. The question is, will it last? And so there is people really moving quickly to Amazon. The customer uptake is pretty comprehensive. So I'd say it's mainstream. So now as you go in the enterprise, you got to do some messaging, right? You got to have the innovation message. So what is the core opportunity for you there in the enterprise? There's a couple of things in the enterprise. I think, you know, first of all, we're helping people save money. We have organizations like Dow Jones that predict they're going to save over $100 million, essentially by shutting down data centers and moving more of their infrastructure to the cloud. But I think the real interesting part is how we make these companies more innovative. That if we can lower the cost of using technology to roll out their new projects, then essentially we take the cost of experimentation and have it almost approach zero. So then now, if you want to try something new, the cost of failure aren't so high that they prevent people from sticking their neck out of the line and trying new things. And so what we see in a lot of these companies that are adopting us more heavily, their culture's changing. Their employees are excited about trying things because when they try something out, the cost of failure is a fraction of what it was before. You don't have to buy servers. You don't have to buy all this equipment. Get data center space. They can try something quickly. And if it works, great. They expand. If not, they don't have to live with all the expense that they try it out. So it's increasing the pace of innovation and also allowing more people in the company to be able to try new things that involve technology because we're eliminating these gatekeepers. Where before, if you get a project, require a lot of money, a lot of infrastructure, think of all the committees you have to go to all the justifications. But if anyone could go spin up these resources with self-service, totally changes the dynamics of who can innovate. Yeah, I mean the whole try before you buy, the puppy dog clothes, as they used to say in the sales tactics is let me try it before you buy it. Shadow IT is the legitimized effect that for very little cost and collateral damage as Andy talks about, you can get something up and running pretty quickly. So the old, ah, that'll never work comment. That's a killer phrase of innovation. It's eliminated. Because I already tried it. Here's the numbers. Is that a big part of it too? I'm a little bit. I mean, it's almost like we need a new term. There's, you know, people talk about shadow IT. And what we typically see is that once you give the CIO the keys to the cloud infrastructure and you set up a governance approach where you decide what people can do, how much money they can spend, what things they can try, then you get the best of both worlds. You still have a vetted platform from a security perspective. You have governance controls to ensure people are doing the right thing. But then IT doesn't have to say no. And it's, oh, sorry, you got to wait in line. You got to wait until next year. So that is the new model that we're seeing where you're seeing developers distributed across the organization and smaller official IT departments but more people doing IT stuff in the company because everyone can have access to infrastructure when they go big on cloud, especially with AWS. And are they getting it? Are the corporate IT guys getting it that this is a good thing for them and they can leverage us to actually add more value in the company and enable more, at the end of the day, more IT usage? Yeah, absolutely. The companies that we talk to, look, they got a lot of questions. If you're a big organization, you want to know if we can meet your security requirements, your compliance requirements. Can you run? Instead of asking us, well, look, we want to do two things. We want to run the software the last 20 years in the cloud. Can you help us with that? And then we want to build these new cloud-native applications so we can be as agile and efficient as some of these new internet startups that now we're competing with. And so we spent a lot of time with them to talk through what they should do first, how they should think about it, what apps make sense to run on us, and more importantly, what the sequence is. What should they do first? Let's ask, it's like, we want to go. We've played around, we've tested, we've had lots of developer decisions for years, but now we want to go big by having a material percentage of our infrastructure in the cloud so we can fundamentally change how IT adds value to the business. Like those are the conversations we love having with customers. Eric, I want to ask you about just the show vibe. Just check the box on the interview here because I want to make sure people can understand. Amazon re-invents your mega show. That's your global conference. And well, why don't you explain? Explain re-invent versus these summits. Sure, so the AWS summits. It's our free one-day event that we do maybe like 14, 15 around the world. It's two purposes. One, for people that are new to AWS, they can come in one day, get an overview of what it's about, how to use it, and get inspired on what they can do with it. And then for our existing customers who are heavy users, they get an update on what's new, which may sound kind of tactical, but we release a lot of new stuff, right? And so that's one of my biggest challenges. That chart is happening. How do we make sure that people know what all the new stuff is? They come here for one day, go to our keynote, go to a bunch of breakout sessions, do some training, and they get ramped up on everything we've done in the past year. And speaking of it, so we had you on last year and we were here. So what's been the big change from 2013 to 2014? We've had a lot of new services that we've released. We're going to new areas. And think about Amazon Workspaces. It's more of an IT business application, right? What you saw our demo today wasn't people coding. It was someone actually as an end user using a virtual desktop on their iPad, on the computer. And so there are different types of applications, but we're still going after that same goal, which is to allow these enterprise IT organizations to take advantage of the cloud with more workloads. Essentially, the larger of a percentage of their projects that they're doing that we can help them with, the happier they are with the relationship. And the test dev conversation seems to have simmered down quite a bit. Where it seemed like last year that was everybody's kind of testing waters. That's where you had initial traction, the initial shadow IT. And that seems to really have died down in terms of- I mean, I think it's kind of gone mainstream or whatever is past mainstream where, if you're a big SAP shop and your developers don't have their own SAP development environments, you're behind the curve. Same for Oracle for SharePoint. That's the new standard. And so people don't talk about it as much because they're already doing it. It's the idea of, well, what are the big bets? What should we use it for next? Should I do big data analytics using like our Redshift product? Or should I build new high-scale web applications? Should this be my mobile infrastructure? That's where more of the conversation is coming on now. Harry, I want to ask you about marketing kind of 101. Take me through the business school level of marketing relative to your vision of Amazon and how the company's operating. Obviously Andy sets the tone up on stage. Very customer-centric, we hear all the people on Amazon talk about, hey, we listen to the customer. So they're tight on the messaging. They're really tight on the messaging. But you start to see tweets on the wild emerge like the new strategy for Amazon is price reduction as a service. So you're seeing these messages come out. So is that your plan to message just the price reduction to show that the continued improvement in terms of cost reductions and improvements in innovation and capability and just kind of be humble? So what our marketing organization is trying to do is to educate our customers in the easiest and most scalable way about what our services do, what are the best practices, how can they use them and how they can save money. I mean, you saw Andy talk about it a little bit earlier. We want our customers to feel like they're spending the least amount of money they need with us because we want a long-term relationship. And on price reductions, I mean, it's probably one of the top three or four most boring parts of marketing at AWS because every service team is trying to relentlessly take costs out of their services. And when they get to a certain point, we pass those cost savings along to customers. It's kind of like clockwork. Is that an internal metric for you guys? You guys all under pressure or mandated that's just the DNA of the company. Let's get the cost out. Let's abstract away cost and complexity. I see there's some bragging rights, a little competition between the teams. How many price reductions have you done? I mean, it's a sign that they're being efficient and that they're making customers happy. It's a great metric. I mean, price reduction and also feature increase. So again, EC2 now with Flash, we started to see some new stuff at the table. That's part of the plan, right? Price reductions and more functionality. Right, so I mean, one of the most important parts of our overall strategy is to constantly innovate both on building new services that let people run more things in the cloud, but then also adding new functionality based on feedback we get from our customers. We like to release services relatively early versus sitting in an ivory tower trying to figure out what the perfect feature set is. We'll get this out early, get feedback from customers. Because we're often surprised what people do with these services and they take on a life of their own but ultimately that's how we get the best results. You guys are like the big gorilla in the industry but I was talking to someone last night at the VIP event in San Francisco, all these CEO venture capitalists on Amazon, they're loaded with money, you know. I'm like, guys, they're like a lean startup. So that's pretty much the case. We validated and talked to some folks. You guys are like a startup. I mean, you're huge, got great resources but it's not like you're like swimming in money, throwing it around. You guys are very tight on the budgets. You don't like just throwing around money. Yeah, if you want to know about Amazon's culture, just type into Google Amazon leadership principles and there's about a dozen or so core values, one of them is for reality. It's kind of, you know, part of how we operate the company and believe in what it means is that we only spend money on things that are useful to our customers and that's a real good grounding. And you see, we don't have 80 foot tall posters of our products or executives here. You know, we spend the time on, you know, computers for people to do training and when we're, you know, planning events we want to have everything focused on stuff that's useful to customers and we build the service too. We try and be relentless in driving costs out of our suppliers so we can pass on those costs to these customers and it's just, you know, when you operate a frugal fashion where you really think about costs you end up being scrappier and you end up innovating more. It sends a good signal too to your customer base because it's like a probably a laundry list of things that you guys have laid out that you still need to do and do to innovate. Yes, exactly. If you waste money on, you know, weirdness, people are going to say, hey, wait a minute, why aren't they spending that energy on building new stuff? Exactly, like we didn't tent Howard Street and close off the road to have a rock concert. And rain on that. Yeah, all you do is you help companies. I mean, we have our crowd chat, have you seen that? We built that all on Amazon, would not be possible without it. We hear testimonial, testimonial, customer saying, hey, Amazon would have been 15 people minimum just to actually manage the gear on an offside without Amazon. So, you know, it's just pretty massive. So, so with that, I got to ask you, the marketing question is, how do you roll up all that goodwill of plutonium in this great, great case study data? You have, I mean, reference ability, it's not a problem. Well, I mean, the number one marketing strategy we have is let our customers do the marketing for us. So, I mean, part of why we do these events is to let our customers and people who are not customers yet interact with each other. And even when we have reception, you know, one of the best marketing strategies if you have a product that people like is you combine your customers, your prospects, and alcohol. And then you let them talk. You have mass questions and that's how you get the real of it. Like, okay, you don't want to believe that people talk to our customers and really get a sense of what's going on. There's too much smoke and mirrors with these old-guard hardware and software companies for much more open, much more transparent, because we believe in our products and they're available for anyone at any time. It's almost like it's not even worth making up things that aren't true because anyone in the world can evaluate any of our services anytime they want. It's almost boringly, boringly good. And you hear Andy talking about, well, we did this for that. We did definitely, it was like a laundry list. I was listening to the keynote. Okay, he's going to stop now. No, it's more just dropping, dropping more and more feature releases. So, obviously you guys are shipping more product. You're reducing the prices. I don't actually ship anything. I mean, push code. We don't want services yet. You push code in the cloud. Turning on. We can create a box for you. You can ship that. There'll be nothing in it. Ship means, you know, the sense of the cloud. But that's the DevOps culture. The DevOps culture is to be scrappy but think differently. So you guys are thinking different things. But I got to ask you, how are you thinking differently because it's clear in ecosystems developing around you. And that's something that you do have to nurture. You have to invest in the community. And you're helping them as business partners now. Not just customers. Your customer base now spans the partners. Yeah. How do you balance it? It's still same philosophy. What tweaks have you made to your job and organization based upon the tsunami of ecosystem growth? Yeah, I mean, our customer ecosystem is really important to our strategy and to our customers. And the way we think about it is, A, cloud's new and people are going to need help. So from consulting firms, systems integrators, managed service providers, which is a really fast growing space. We want to make sure that when our customers want to bet big on AWS, there are those trusted people with certified engineers who can help them either on a short-term or long-term basis. And then on the technology partner, ISV side, we spent a lot of time making sure that we work collaboratively with these companies to sort of certify these applications to run at AWS. And then we create pre-configured versions of them that run on our marketplace where our customers can browse through a catalog of software pre-configured around AWS. They can install with one click of the button and then it just shows up on their AWS bill. So we're trying to make it a real lot easier for people to use a lot of these partners technology. You know what? We're not going to come out with everything. You know, we like the creativity of our partners. The customers like to know if they bet on AWS and they say, you know, I wonder if there's some good no-SQL databases that run on AWS. Oh, there's Mongo, there's Cassandra, and wherever space you pick, there may be something we offer and there may be four or five other solutions from our partners. We love that choice because that's what customers ask us for. Well, congratulations on all your success now. And my final question for you is really probably the hardest question and you couldn't answer it or not answer it. Obviously the competitive landscape has significantly increased the heat in the kitchen around you guys. For a while you were uncontested. You had some people kind of picking ankle biting around Amazon's, you know, leadership. But now you got some pretty big players. Got IBM, HB, Oracle, Google, EMC, Pivotal, VMware, Gunning, Rackspace, with OpenStack. All those things kind of going around. I know you don't focus on competition and you focus on the customer. We've heard that before, but like, you got to think about that. That's going to put some pressure. How is that affecting you guys? I see your mindful of it. Are you guys doing anything different to address it? I've never seen a market before where it wasn't healthy for both the leader and for the customers to have competition. And we've always expected this to be a market that would have multiple vendors. When you look at every other technology space that was new and became large, there's multiple vendors. And it, you know, it enhances innovation, keeps people honest. It's a good thing. So the final question then is, what will you tell the folks out there who are watching, is Amazon Enterprise ready? What's going on right now? This event, you've got the big announcement. Let's give them a recap of what you guys did today and comment on the Amazon is Enterprise ready or the Enterprise may be ready, not ready for the Amazon. So how do you respond to all that fun out there? Yeah, I mean, that was a question people asked a lot about us in the enterprise three, four years ago. I think we've invested a pretty big deal of our R&D over the past four or five years on just maniacally going through all these enterprise features. I mean, if you look at Gartner's Magic Quadrant for Infrastructure and Service, which is 100% designed for enterprise decision makers, we're the far and away leader. And we mark off their checklist pretty well. And I think that's one of the reasons why we're really becoming the safe choice for IT managers in large organizations, large enterprises, large government agencies. I mean, my biggest point of advice is to take a look at our website and we're constantly coming out with new services. And if you haven't looked at us recently, I bet you're going to go there and find some things that you didn't know ran on us and you'll get some ideas about new projects, new workloads that you can run in the cloud. Okay, final word on reinvent to now, three major things were announced, Kinesis AppStream and Workspaces. Are you happy with what's happened since then and now it gives a quick feeling from you? Yeah, I mean, we did private beta for all three of them. We had a lot of participation. We showed in the keynote some of the real creative applications people are building with AppStream where they're streaming very graphically intensive applications out to a variety of devices really making it easier for developers. Workspaces, the interest, I've never seen a product like this before where the customers in the private beta are just so excited about giving us new features, talking about how we can make it better. Tons of energy, tons of excitement. And Kinesis is one of these things where we didn't know what to expect. I mean, it's a real time analytics service to ingest massive amounts of data and you can build all kinds of apps on top of it. And I think one of the things we talked about today was a gaming company Supercell that makes a lot of classic plans to take all the quickstream and usage data of their application to figure out all these intelligent in-game offers and how to make their games more efficient and more fun. And that's the best part is when we come out with technology that is pretty broad and can be used for a lot of things and then we let the customers be creative and we can see what they do. And then they do. Yeah, then they do. I'm going to tell you. Luckily they share with us. And then it's not general anymore, right? Arial Kelman, you actually have the hardest and easiest job in the world kind of at the same time. One is you just have great customers. You have the sizzle and the steak as we say, meat on the bone. Great product mix. You guys are introducing that stuff. We hear prices dropping and functionality increasing and innovation happen at the same time. It's actually quite an amazing thing. So we're really impressed. Again, we're happy customer with the proud chat. Thanks for coming on theCUBE again. Appreciate it. Thanks for having me. It's theCUBE. This is what we do. We go out to the events. We go where the action is and the action is at Amazon Web Services Summit in San Francisco. This is theCUBE. We'll be right back with our next guest after this short break.