Adam Selipsky gave his first AWS re:Invent keynote this morning since taking over as CEO from Andy Jassy earlier this year. He had big shoes to fill, but it’s not as though Selipsky was a complete stranger to the AWS team. In fact, he had been at the division since its earliest days, helping Jassy to build it into a substantial business, before leaving in 2016 to become CEO at Tableau.
He began the day with a history lesson, and he didn’t need to count on others to feed the background to him, given he had been there when they opened their doors in Seattle all those years ago, a pig-in-a-poke of an idea to sell web services.
As Selipsky told it when he presented the cloud infrastructure concept to early potential customers, they didn’t quite get it. “What does this have to do with selling books,” he was continually asked.
While he didn’t share the answer he gave, I would speculate that it had nothing to with it, and it had everything to with it. Years ago, at a presentation with Amazon CTO Werner Vogels, he talked about similar conversations. As he said at the time, Amazon was never about selling anything. It was about building a web business at scale.
If you look at the top three cloud infrastructure vendors today — Amazon, Microsoft and Google — they are all really good at building businesses at scale, and running data centers is a big part of that. Looking back it seems almost logical that a bookseller came up with the idea of selling infrastructure services, but it certainly didn’t at the time.
In 2005 nobody really knew what the cloud was, or if they did, it wasn’t a concept that wasn’t widely understood. I remember the first time I heard the term in the 2008 timeframe at a Web 2.0 Conference in Boston. There, representatives from Amazon, Google and Salesforce gave a talk on what the cloud was and why it mattered.
I remember IT people lining up at the microphones for questions and comments, and being openly hostile to the concept. They weren’t sharing their company data with a bookseller that was for sure — until they did.
Even Selipsky himself didn’t completely get it when he came on board. As he told Bloomberg’s Emily Chang in an interview recently, “So the call I got went something like, ‘We have this initiative to turn the guts of Amazon inside out and expose it to other people.’ And it sounded intriguing, but I confess I didn’t fully understand what that was all about.”
As Andy Jassy described the genesis of the idea in a 2016 TechCrunch article, it came about during an executive offsite brainstorming session in 2003:
As the team worked, Jassy recalled, they realized they had also become quite good at running infrastructure services like compute, storage and database (due to those previously articulated internal requirements). What’s more, they had become highly skilled at running reliable, scalable, cost-effective data centers out of need. As a low-margin business like Amazon, they had to be as lean and efficient as possible.
It was at that point, without even fully articulating it, that they started to formulate the idea of what AWS could be, and they began to wonder if they had an additional business providing infrastructure services to developers.
And eventually, they did what they described to Selipsky when they recruited him in 2005. They turned guts of the bookselling website inside out and sold them back to customers. It didn’t have much to do with selling books, yet it had everything to do with it, — and that idea today is a $60 billion business.
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