 Okay, welcome back everyone. We're here live in Las Vegas. This is SiliconANGLE and Wikibon's theCUBE. This is our flagship program. We go out to the events and extract the ceiling from the noise. I'm John Furrier, the founder of SiliconANGLE. I'm joined by co-host Dave Vellante, co-founder of Wikibon.org. And again, we've got another executive from Amazon here inside theCUBE, Terry Hanold, VP of Cloud Commerce, Amazon Web Services. Welcome to theCUBE. Thanks, I'm really happy to be here. So we want to get into, you're Vice President of Cloud Commerce. Okay, that basically is the marketplace. You guys are obviously innovating. We had folks on who had a vehicle system and obviously you're just shopping the market. At the same time, you're innovating. You rarely see that in a company these days. And when people are doing both of those things, it's really a special thing. So you guys are doing a great job. Congratulations on that. But you got to roll out some solutions now to help the partners make money. That's the commerce side of it. Buyers and sellers. So give us a little overview on what does the Cloud Commerce mean? And what's some of the tech behind it? What are you guys doing for folks out there? At the end of the day, Andy Jassy said I'm reducing the prices for customers. It's the opposite for partners. They want to make money. So if you have a good ecosystem and everyone's getting paid, everyone's having fun disrupting solutions. So talk about what you guys have. So on the marketplace, we've got two sets of people we think about. The people who are consuming technology and then the people who are building the technology and providing it. So buyers and sellers are in our case technologists and software companies. And so when we think about how do we want to be agile and how do we want to innovate for both of these? The answer is for the guys who are using technology, we want to take all of the musts and all of the fuss out of I have a problem. I need a database to store data in. All the way to I have a database and I can start putting data in it. And traditionally you've got people who, well, I have to do an RFP. I have to do a bunch of research. I have to get my procurement team involved. They're going to do the license for me. Then I have to talk to IT. They're going to spin up the hardware servers for me. Then I have to deploy the software. And weeks or months later, now I have a database. So, go ahead. I was going to say with the marketplace for the buyers, the whole notion is you find your software, you have pricing that is 20 cents an hour or 30 cents an hour just like the cloud and spinning up a database, you click a button. The hardware is provisioned, the software is laid down, it's configured and you're ready to go within a minute. You know what's great about Amazon is the diversity of people who work with the company and in the partners. We have James Hamilton, old school dude, he just loves his job. He's got his evidence. So much fun. I mean, it's almost like he's intoxicated every day at work just on the pure geekness of it. Then you got the young guns coming out of school. We talked to some Stanford CS guys, the Carnegie Mellon, building solutions. So you got a range of diversity of people who just love what you're doing. But if you think about the B2B marketplace, they've been around for a while. B2B exchanges, buyers and sellers, it's kind of been around for a while. But when you bring the notion of DevOps into the equation, kind of the disruption side, it's not selling products per se, it's actual software or API based services where you're launching primitives out there. That's a DevOps commerce model in a way that is going to change the game. So if that's the belief that the API economy is around the corner, what is the key design criteria for you guys as you want to enable explosive commerce out there? What's the secret and what's the guiding principles that you guys operate under? So the fundamental magnetic north for us, the core tenant is agility. How can I let people build software and people sell software faster? If I can make them faster, they can come up and invent whatever they want to go invent. If I can make the cost of failing lower, they can go ahead and do it. So with concrete examples, if I want to try a database but it only cost me 50 cents an hour or 10 cents an hour, I can try it. If it's working well, that's great. Now I'm going to move it to production. If it's not, I'm going to stop. And for a software company, I'm tired of paying sales reps to spend nine months trying to negotiate contracts, do proof of concepts just to get a customer. If I can get a customer in a matter of minutes, all of a sudden I'm getting feedback right away from my market. I can change my pricing or my product. I can iterate as fast as AWS or another fast software company. So the main benefits time to value, right? So essentially you can double down where it's working. And if it's not working, you can fix it, get back on the track, if you will. Get started fast, fail fast when necessary and when you're succeeding, scale fast. Succeed fast and scale fast. I think you guys are pretty dogmatic about your offerings, making those offerings available to all the customers choice, right? I mean, I got to have the same security, everything. I mean, small guys, big guys doesn't matter. You don't like to do one-offs from what I can gather, right? My specific question is around bring your own license. So you got guys bringing their own license, that's cool. But once, when that occurs, you want that software to be available in the marketplace. Correct? So how's that work? So you start off maybe as a bring your own license deal. You encourage people to put it up in the marketplace. There's like a grace period, right? There's some fuzzy language in your website that I've been trying to understand. I think you probably can help clear it up. What's going on there? The underlying notion is choice. So customers should buy software the way they want to buy it. It's our job to enable it. It's not really our job to force them one way or the other. So if they have licenses that they've already bought, they should be able to come up, use their software. We should make moving their license onto AWS as simple as possible. Some, a lot of that is our responsibility. A lot of it honestly is also the software company's responsibility. They've got to make licenses and allow people to run their software in the cloud. But we work very hard with other software partners like Microsoft and Oracle to try to go do this. The other piece of it is once we've got a lot of options, if someone's got their own license, that's great. If they want to do it by the hour, we want to provide that as well. And so it's really up to the customer to choose. Okay, but there's a third party in here, which is the ISV, right? Now many ISVs, we just had Splunk on there, like, yeah, we love that. It's great, it's expanding our market opportunity and perfect for them. I can see other ISVs maybe fighting that a little bit. Do you see that kind of friction and how do you deal with that? Sure. Yes, we see it, honestly, the younger companies that grew up cloud, they're like, I get it, this is great. There are companies who are like, whoa, we've been selling software with certain prices a certain way for years now. We see the cloud, but you got to give us some safety rails, we want to work our way here. How do we kind of split the difference? And so the short answer is at launch, the marketplace was really focused on utility price. You want to pay for your software the same way you're paying for your hardware. So we have partners like SAP and Cisco companies with big established market bases. They are companies that have been around for decades. They are all ready, you know what? We're ready to jump in. There are other companies who maybe aren't ready to go there yet. It's our job then as a marketplace to start building out the business models that they want. So over time you're going to see us adding more and more business models, support for different types of licensing or pricing so that any seller can sell the software however they want. And hopefully buyers will give them clear market signals about what kind of licenses they'd like. Yeah, so it's an interesting balancing act that you have to put. But certainly in the enterprise, you recognize that Sir Naya's fees approach the market in a certain way and you recognize that. But it's a minority, right? Is that fair to say? It's a minority and it's also, it's changing incredibly quickly. Like if I had conversations two years ago when we were thinking about it, we were still in private conversations. You know, the way the industry thought about the cloud was much different two years ago than it was a year ago, than it was six months ago. The pace of acceleration is picking up remarkably. In the last two days here at ReInvent, we've had 38 high visibility companies announce new products on the marketplace. So. So I got to follow up on this. Yeah. There are companies, you know, we talk about them all the time, John, that will use audits as a weapon to get, you know, and enterprise licenses renegotiate. That's not your way, you're the opposite. You send out emails saying, hey, did you know? Oh, if you did this, you could save a bunch of dough. Yeah. You could pay us less. Yeah. I mean, that historically hasn't happened in the enterprises, completely different minds. And you feel like that's just inevitable that that's where the market's going. Is that fair to say? We have a business model. We like it. It's not the only business model. It's not our job to impose it on all of our partners. The way I see it is we should make it possible for them to do whatever they want with their business model. We also have customers who have opinions on this. And so to your specific example, over time as we start putting in more alerts about spend and how you can optimize your spend, we will make that available to ISV partners as well. If they want to use it, they can. We're not going to force it on them. I suspect their customers would like them to go use it, but that's in between the customers and the market. You're seeing this. As you give customers money back, what do they do with that money? They pour it back into innovation. And so you make more money. This is the thing. It's brilliant. I really believe that if you remove, but we firmly believe at AWS, is if you lower costs and make things easier, in the long run you will have more customers, have a better business, and have customers doing more, then if you put friction in it and try to scrape every last penny off the table. But again, that's our business model. We're going to let our partners choose and our customers choose. You got a lot. Of course you like your business model. You're disrupting and you're innovating at the same time. Again, in history, it's very rare to see someone do that. And you're experienced a software veteran. You're a couple of years over 30, kind of like us. You've been around the block. That's right. I keep from trying 10 years. Maybe I get younger. But I want to ask you on two perspectives. One is, kind of a historical perspective, what's different now, fundamentally, that you can say, hey, we are in a good spot that makes this world completely different compared to how it used to go in businesses, whether it's buying and selling products. And two, talk about the global impact. Because now you're talking about globalization. You're talking about Amazon having geoclouds and geographic snapshotting. Some really cool stuff being talked about under the hood. You're now potentially looking at a scenario where I can push a button and sell stuff globally. It's not an easy thing to do. So talk about the perspective of where we are today, relative to your experience. And then talk about that global scale. What needs to get done? What do you guys do to allow that globalization? So the biggest change for me over the last, what? How old did you say I was? Five years? 10 years out of college. Okay, go ahead. 20 years. That's fine. Okay. We are living in a time where when you remove friction, you see more speed and all of a sudden, things become possible. So if you drop the cost of infrastructure so that you can buy infrastructure by the dime or by the dollar and not by the $100,000 chunk, all of a sudden, people start innovating and building software. It never would have occurred to them to go build before because it took nine months and $100,000 to get a provision so you could go do the testing. So that mindset where younger developers or older developers who are now working today, they don't tolerate some constraints that historically, in IT, we tolerated. And startups now, like I had startups a decade ago, like they wouldn't tolerate having to go get however many million of dollars and then spending 90% of it on infrastructure. And only 10% of it in here. There was two taxes. There was the technology tax of all the kind of gear and software sales and also time tax, the lag. And so now, for better, for worse, we're impatient. We want to go be free to innovate and we want to see the results now. And I would say, probably this is true as well for a lot of the people I work with, we're not as afraid of failure as I was or the teams I worked with 15 years ago because the costs are less. Like we screw up at Amazon with surprising regularity and we look at it, we say, hey, we can do better and it takes us very little time compared to where we were 10 years ago to go fix it. There's minimal collateral damage in that area. That's the other key point. Exactly, we can do it privately. We can learn like crazy and that allows us ultimately, I think, to innovate faster than any company I've ever been with and get it right faster because we're not afraid of our own shadow. And so I don't know how to, without sounding like an academic, I don't know how to trace it back to root causes but when you reduce the costs and you allow people to cycle faster and innovate faster, you get to build cooler things and then you start expecting it. Good stuff happens. So talk well then. So let's go down to the globalization because it used to be the old days. You launch in North America, you get it right there and then you sequence out into the global marketplace. Now there's pressure to be global instantly, right? So that's a whole nother ball game. There's all kinds of regs. There's all kinds of localization issues. If you remember the days, localization was huge now. So with cloud, there's now pressure to launch globally. What are you guys doing? What's your vision there and how do you talk to that issue? It's awesome. Part of my job is I run the underlying e-commerce infrastructure for all of AWS. So when you buy EC2, I have to go bill you and pay you and collect it. So I will sit in rooms and I'll listen to a scenario that goes like this. What happens if a German national who works for a South Korean company is traveling to Japan and goes and spins up a EC2 instance in Brazil with a US software company software on it. Tax payments, regulatory, import, export, accounting. Like how do you actually flow that back to your books? And half the room will be hammer and tongs with tax people and accountants and legal. Like this is so hard. And half of me is like, yeah, this is hard. This is a hard day at the office. And the other half of me is cackling with glee because we have 20 years at Amazon of solving these kind of global e-commerce problems. And so for me, one of the biggest pieces of value we provide in the marketplace is we've thought through this. So if you're a software company 10 years ago and you wanted to go sell in Germany, you had to go find a local provider who knew German regulations, who knew how to deal with local currency and there's a lot of friction with you about it as well. Could take years. And now you can do it in the marketplace or in Amazon. Like any customer in the world can use your software. So I like it a lot, this globalization. I actually think we're pretty good at it. And that's one of the things I'm the most proud of and I think of the value that we're giving from the marketplace. Okay, so let's geek out a little bit. Let's go under the hood, because obviously one of the things I know is about Amazon and our experience as a customer, a happy customer of Amazon with our crowd chat application platform is there's a lot of stuff that's wired differently. Obviously you talk about full stack and you got managed services at the top of the stack. You got all kinds of goodness in the middle, EC2, queuing, et cetera, et cetera. And then you got all the iron underneath all wired differently. So how is your web service marketplace wired? Talk about some of the, if you can, how it's wired, how you're putting it together and what that does for the partners that are selling through the marketplace. Okay, great. So we've got the front end services which looks like a marketplace website. No surprise, Amazon has built a couple of these. And so technically we are able to leverage a lot of the IP that amazon.com, the retailer, has built over the last 10, 15 years. So recommendations and similarities in search and browse, all of that, my teams get for, if not free, at a huge discount. And so building that part of the site is in many ways we're able to look at and say this is just another product, another set of marketplaces. But then underneath it, this is where we start to diverge from retail. Instead of a book or a blender, we're selling software and the business models behind software, utility pricing, what does it mean when someone updates software or there's a virus patch that comes out or you want to go from a single instance to a fleet of instances. All of that fulfillment or deployment of software is where a lot of the guts and a lot of the IP from the marketplaces has come into. So the ability to take software and then quickly deploy it out, frankly is where we spend a lot of time working on it. And the last piece is it's the payments and the e-commerce part. Like again, this is playing to our strengths. I love the fact that I can go and watch someone consuming software every minute, build them and understand what's going on and we can do it at a scale that is incredible. What's the coolest piece of tech in the stack for you guys with the web with the marketplace that you like? It's more of a personal question. You don't have to take sides with anyone of the children within the AWS community. But what piece did you like to say this is bad ass and drives a lot of the value? I think it is one click. I think it is the notion that I can find software, click a button and have hardware deployed, software deployed, configured, running and ready for use in a minute. The core notion of making consuming expensive, or sorry, not expensive, but complicated software infrastructure as easy as buying a Kindle book, that fundamentally is profoundly cool. That's a lot of friction you just took out of the process for both the buyers and for the companies who are selling the software. Terry, final question to end the segment. I'm getting a lot of pressure here from the folks to move you along to your next meeting, but I got to ask you, you guys are driving on the road 100 miles an hour, great lead, doing great stuff, innovating. What's the bumper sticker on the car as it leaves reinvent this year? What's the tagline? What's on the bumper sticker for this event? What would you put on that bumper sticker this year? For AWS as a whole or for the marketplace? For the marketplace, the whole vibe of this show, coming out of Vegas, the car's driving away. What happened here? What's that bumper sticker on the car from reinvent this year? Go faster, innovate faster, let us help. Okay, we're here live at theCUBE, exclusive coverage of Amazon ReInvent. I'm John Furrier with Dave Vellante. We'll be right back with our next guest after this short break. Stay with us.