 Live from Las Vegas, Nevada, it's theCUBE. Covering AWS re-invent 2016. Brought to you by AWS and its ecosystem partners. Now, here are your hosts. John Furrier and Stu Miniman. Hey, welcome back everyone. We are here live in Las Vegas for Amazon Web Services, AWS re-invent 2016, their annual user developer conference. I'm John Furrier with SiliconANGLE. Showing with my cohost, Stu Miniman with Wikibon. It's theCUBE, our flagship program where we go out to the events and extract the signal from the noise. And right now we have some really hot signal. It's Andy Jassy, the CEO of Amazon Web Services. Welcome back to theCUBE. Great to see you, CUBE alumni. Three years in a row now. You've been on theCUBE. Great to have you back. Keep the tradition going. Thanks for coming on. Hi, it's great to be here and I wanted to congratulate you on your 29th birthday today. I wish. I'm 18 actually, I'm going to go that way. I'll never get over 18. Okay, I appreciate that. I appreciate that. Mary Kamarata bringing the cake out for the team. But what a birthday present for us to be at theCUBE this year because you guys have celebrated your 10-year birthday a little bit younger than I am. But the world has changed in the past five years. We sat down at your house and your sports bar talked about the future. And that's all on SiliconANGLE.com and Forbes Magazine.com. But you guys have to set the agenda and 32,000 people up from 19,000 is a significant uptick in attendance. The enterprise cloud market is changing. You guys are disrupting your thoughts on what's happened since Tuesday night with James Hamilton laying out the secret sauce of Silicon routes. Back it's not being touched by anybody else, efficiencies, scale. Yeah, well, for us, it's unbelievable to see how many people are here at re-invent. As I said in the keynote yesterday, we weren't sure the first year that we could get 4,000 people to come. So to have 32,000 people here and 50,000 more in our live streams for the keynotes is just, it's really inspiring. And our teams spend most of their time thinking about new customer experiences, new features, new capabilities that enable our customers to build more for their customers and then operating the services. And for our team to have a chance to be here with all of our customers for a week and just see how excited people are about what we're doing with the platform. I mean, you really feel it when you're here. It's a movement and it's a movement because it allows builders to build customer experiences much quicker than ever before and change their businesses. You guys got to, I know Stu's got some specific questions on some specific points, but I want to get your thoughts on the Amazon, what I call spring in your step. For the first time at re-invent, I've seen some, not bravado, but more confidence around taking a position. Verner Vogel said, hey, immediate, sometimes I don't understand things or, hey, why do I want to get a lower price by doubling up front and not seeing the sales guy, you mentioning a little bit of Oracle. But mainly it's the themes around the old guard and a new way. So I want you to take a minute to explain your view on this new way, this new environment because you're comparing and stressing old ways of doing things, how people buy from IT suppliers, how technology is coded, deployed, and this new way where the game is all new ballgame everywhere. Scale changes it, how people buy are changing it. Can you share your thoughts on this new way? Yeah, well, that's a, I mean, there's so much that we could share in that area, but I think that if you think about what's different about a company like Amazon and a business like AWS relative to the companies who've been providing infrastructure for the last few decades, there are a lot of differences, but I'll list a few. The first is I think many companies talk about being customer focused, very few walk that walk. And I think Amazon and every business, including AWS, is extraordinarily customer focused. Everything we do starts with the customer and moves backwards from there. 90% of our roadmap and what we build is driven by what customers tell us matters. And the other 10%, we try to listen to what customers are trying to articulate and then read in between the lines and invent on their behalf. I'd say most of the big technology companies, the Old Guard, are competitor focused and that could be a successful strategy. They can wait and see what others are going to do and then try to one up them. It's just not ours. We tend to be customer focused. Second thing is we are pioneers. We hire builders who look at customer experiences and see what's wrong with them and then figure out how to reinvent them. Most of the Old Guard technology companies have lost their will and their DNA to invent and so they acquire most of their innovation and that can work too. But I think in a space as dynamic as the cloud, which is the biggest technology shift in our lifetime, you are much better off with a partner that has the most functionality, that's iterating the fastest, the most amount of customers, the biggest ecosystem who's had the vision for how these things fit together from the start. And then the third thing I'd say is that we are unusually long-term oriented. You know, I think one of the standard Old Guard tactics is that when a deal is to be done at the end of the quarter or the end of the year they show up at your doorstep and they harass you till you sign a deal only to be heard from again a few years from now when you actually need to sign a new deal. That is not the way that we pursue our business. We're trying to build a business and instead of customer relationships, that lasts all of us. And so we operate, we treat customers, we think long-term and we iterate in a different way than you see the Old Guard do. Andy, you wrote the business case for creating AWS. I think if somebody wrote the case study today that you talk about the flywheel, you talk about the effect that scale has on your business, I think many look at it as your scale and that flywheel allowed you to kind of compress margins in the industry overall. Why don't you write the next business case? How is scale, let's kind of say if margin and you talked about how the race to zero wasn't it, beyond kind of the financial piece of scale, what is the advantage that you have with the experience and the scale and is there a new flywheel that goes beyond what we've been talking about? Well, I think that there will be multiple successful players in this space because the market segments is something like AWS addresses are trillions of dollars worldwide, but there aren't gonna be 30. It's gonna be a small handful and it's in part because scale really matters and in part because the amount of functionality that you need for people to choose you as their primary infrastructure technology platform is massive and we have a lot more functionality by a larger amount than anybody else. And I think that if you look at a couple of the key criteria and reasons that we've been successful, one of them is that we just have iterated so quickly. I mean, I think that the rate at which we deliver new capabilities for customers is pretty unusual. I mean, every day on average customers wake up and they have three new capabilities that they can take advantage of just by virtue of being on the platform. But we're also on top of just delivering quickly. We're innovating at a really rapid rate. I mean, look at what we did in building the NoSQL database DynamoDB that we've built. Look at what we did in building our own database engine in Aurora, which is the fastest growing service in the history of AWS. We just made Postgres compatible yesterday. Look at what we announced on the IoT side yesterday with green grass and with snowball edge. Look at what we did even with Snowmobile where it's been impossible for companies to move large amounts of data. Look at how many instances we have and then look at us bringing FPGA instances to the cloud. I mean, the pace of raw innovation on the AWS platform is very unusual. And I think what that does is that creates its own flywheel where because you don't have to spend $100 million upfront to buy an infrastructure platform, you only pay for what you use. When you make the choice of who you're going to partner with is your primary infrastructure platform, you want the platform that has the most capability because it allows you not just to move your existing apps but to be able to launch new ones and any imaginable business idea you have. So one of the advantages Amazon has had both on the dot com side and now on the AWS side, it's your data. You've got a lot of information. I think Matt would actually said that's part of a new flywheel that you're going to be doing. How much of that data is just what Amazon's going to be able to drive and how much will that kind of spread to the ecosystem and your customers? Is there data exchanges or how do you look at data? Well, we certainly have a lot of data and a lot of models and a lot of deep learning capabilities and we exposed several of those through the AI services we announced yesterday but I think one of the significant flywheels you'll see over time is that so many customers are storing their data inside of AWS because they love our storage services and our data stores that they're going to want to use that data and they're going to want to layer on top of it all kinds of analytics services whether it's batch, whether it's various Hadoop applications whether it's real-time processing of streaming data, they're going to want to run their data warehouse off of it and they're going to want to run machine learning models as well as their AI models on top of it and even though I think loads and loads of companies will use the AI services that we released yesterday, I think a lot of the biggest machine learning that's going to happen is companies own data. Companies have huge amounts of data that they want to get better signal from and a lot of that data lives on AWS and they're going to use a lot of the analytics and machine learning tools that we have to get more value from it. And I want to ask you specifically around the cloud competition. We've said on the queue, I think four years ago at the first reinvent that we were here, it's not a winner take all, it's a winner take most. The multi-cloud conversations have been going around and that's been kind of confusing people as well. One of my goals this year at the re-invent was to look at the VCs, dig deep, went to all the parties, talk to entrepreneurs. I wanted to find out from the Canary in the coal mine the startups, the developers, what their sense was. They all love AWS because you've had a great service for them. But now as the competition comes in, Microsoft in particular, spending a lot of dough, trying to lure them in to their ecosystem, Google, I mean they just have some tech, not a lot of sales force. These startups want to build their own sales forces and they might not want to compete with Oracle or Microsoft who have monstrous sales force, massive commission incentives, all kinds of mechanics that they're doing in the day and their product may or may not be as strong as you guys. What's your message to that group of people that want to win with you? What do you say to those guys and how do you look at that and how do you respond to their feedback and what's the outlook for them? Because that's a big question on people's mind is, I love Amazon, I want to win with them, but I might be lured by it. Well, I think if you look at the startup market segment, the vast majority of startups continue to choose AWS as their provider and in fact, you could argue an even larger share than before and the reasons are a few fold. Number one, at the end of the day, what startups want is they're trying to build incredible businesses and they're often trying to build businesses where the idea never existed before and to do that well, you need the broadest functionality you can get. And AWS is much broader functionality than anybody else. There's also a much larger ecosystem around our platform. So if you actually want to use other software in your business, you want to be able to use it on the infrastructure technology platform that you choose. And again, many more ecosystem providers than AWS platform, but they also are building applications where even though they're startups, the security and the availability of those applications are a big deal and there's just a lot more maturity in the AWS platform because we've been at it a lot longer. You can't learn some of those lessons until you get to different elbows of the curve. And as Gardner said, because AWS is several times the aggregate size of the next 14 providers combined, we just have a different scale and a different set of lessons. Now, we also help our startups and we go to market with our startups and we help them get in front of our customers and we have a lot of enterprise customers on the platform who are super interested in the new technology and the new offerings that our startups have and we continue to put them in front of them. So we're saying that obviously Google, I've said this on theCUBE, actually this morning, Google doesn't really have a sales force, not known for customer engagement, they're known for technology. And I kind of hinted that Amazon doesn't have many sales guys, but you do, apparently. We have a lot of sales guys. Can you talk about the number, how many sales people, what's the field organization look like and can you clarify that potential misconception that Amazon is just a self-service cloud? Yeah, well, when we launched AWS in 2006, we had two sales people. And in fact, one of the first calls our first sales person made was to Don McCaskill, who's the CEO of SmugMug, who has been just an incredible customer of AWS and provided so much valuable feedback in the 10 and a half years we've been in the market. But since then, we have a very large field team. I mean, this is not a small team. It's a very large field team with a lot of sellers and a lot of solutions architects and a large professional. Yeah, I mean, it's, you know, we don't disclose the exact number, but it's thousands. It's a significant team, sellers, solutions architects, professional services, training, certification. It's a big team and we're continuing to grow at a very rapid rate. Yeah, Andy, you know, that rapid rate is amazing to watch because, you know, you've spoken to us before about, you look for builders, you look for people that, you know, want challenges and keep learning. I've talked to, you know, a few friends this week that have joined Amazon and they said, the culture is different and in a good way. And I want you to talk about kind of that Amazon ethos. There's, you know, a lot of companies have like mission statements. You guys have leadership principles that are up on your website. I hear they are, you know, quoted quite regularly, you know, in daily life and it's, you know, very different. Can maybe give us a little bit of insight on that. Well, we have 14 leadership principles and I think they've been the single most important reason that we have been able to scale as fast as we have and scale across the world the way we have without losing our culture. And, you know, there are so many of the leadership principles that I think are really interesting. You know, one of them has to do with hiring and developing the best. And we are really vigilant about not lowering the bar. When you're trying to hire as many people as we are at Amazon and AWS, a big temptation is just to lower the bar to allow you to move quickly. And that's always a mistake when you're trying to build great products for customers. I like, and I'll give you a couple of leadership principles I like. One is the leadership principle that's being right a lot. And when we first started, when we rolled out the leadership principles, people thought being right a lot meant that it had to be their idea they had at the start that you went with. And people would get dug in and argue for their idea, but being a leader and being right a lot means that you get to the right answer regardless of whose idea it was at the beginning and regardless of how many times you change your mind along the way. Great leaders change their minds when they get new information. So I really like that leadership principle. I also really like have backbone disagree and commit. And so what that leadership principle is about is we don't just make it an option. We expect employees, if they disagree with the direction we're headed, regardless of the seniority of anybody in the room, that they speak up and say, we're going the wrong direction. We're doing the wrong thing for customers. Even if we end up making the same decision we're going to make before, we end up with more rigor in the decision. And people can argue as long as they want as respectfully as they can in making the point. And we're at the end of the day a truth-seeking culture. So you know that old adage about two people look at a ceiling and one says it's 10 feet and the other says it's 14 feet and they say, okay, let's compromise, it's 12 feet. Well, it's very rarely 12 feet. And so when you have a truth-seeking culture like we have, it encourages people to disagree and debate with one another. But then once we make a decision, the disagree and commit means that even if it's not the direction you were advocating, everybody has to get on the same page in the same way. Well, the truth-seeking argument you could say, well, if the customer's not involved, which version of the truth, the customer has to calibrate that, right? I mean, from your standpoint. Ultimately, we try to get customers involved in decisions we're making and we speak to customers. Or input from customers. Yeah, and we get input all the time. But there are also times when you're making these decisions where you can't perfectly know, we're trying to make what we think is the right decision for customers. We get it right a lot of the time and sometimes we don't. And if we don't, then we'll learn from it. We're getting the hook sign here. I got to get this in. But I got to ask you a personal question. Do you get worried that you guys might get too cocky? I mean, right now you're on a great run rate. The distraction is amazing. It's, for me, personally, to see it is pretty proud to watch you guys do this. I'm a big fan, as you know, for a customer. But you're doing great work. How do you guys not get too cocky? What's the ethos? What do you guys, what do you say the customers would say? Getting a little too big for your britches, Andy, and team? How do you calibrate that? I think that a lot of that has to do with the culture of the team. And I think if you look at the culture of this team, it is not a cocky team. It's not an arrogant team. It's a customer-focused team. And, I mean, I think we're pretty thrilled with how things have gone the first 10 and a half years. I don't think any of us would have had the audacity to predict that we'd be where we are. But I think we all know that the next 10 years are going to have even more innovation and change in the first 10 years. And so that's what we're really focused on. And another one of our leadership principles says that great leaders don't believe that their body odor doesn't stink. And that's really intended to say that we recognize that there's all kinds of things that we can be doing better. And we have to be a constantly learning organization. And that's the way we think about our business. Well, we got a lot of management-style content on SiliconANGLE, my third part of my three-part series with Andy. Final question, I want you to summarize your keynote. Really well done. You had some nice, clever content in there, the whole superpowers, a bombastic claim with some, that validated with some meat. Good, very clever. I like how you did that. How would you summarize the keynote? Did the boiler down to what you were trying to accomplish? What were you trying to convey? What was the core theme of your keynote yesterday morning? Yeah, I think the core theme really is that with the cloud and with AWS, builders have capabilities that were never before available to them on-premises or elsewhere. And with those capabilities or superpowers, it allows them really to take on any technical challenge that they're facing and to build and implement any idea they can dream up. And that was really the theme. And then sprinkled in there, we had a few announcements, 14 to be precise yesterday and another 13 today. A truckload. And then some customers who I think are really vivid illustrations of really reinventing their businesses and building customer experiences that weren't easily possible before doing it on top of AWS. Well congratulations on all your success. I know it's still early. I know you don't get too cocky knowing you personally after sitting down with you. And reinventing is about pioneering. So you got to be humble. And congratulations. Andy Jassy, the CEO of Amazon Web Services here in theCUBE. I'm John Furrier, Stu Miniman. You're watching SiliconANGLES theCUBE. We'll be right back with more live coverage of AWS 2016 re-invent after this short break.