In a candid conversation with Brian A. Pereira, Werner Vogels, chief technology officer of Amazon.com, discusses growth of its business in India.
Excerpts:
How has your business grown in the past one year?We have the right variety of customers here, with some being the oldest. Customers such as Hungama have been with us for eight to nine years. We now have a local region, which has really accelerated. Last year, we had 75,000 customers. It has grown to 120,000 — that’s a growth of over 50 per cent. Our first quarter global revenues were $3.7 billion, with 42 per cent growth in revenue. So it is a $14 billion run rate at the moment. This is healthy revenue growth even with 60 per cent price reductions.
Which verticals have witnessed a lot of traction?In financial services, we have customers such as Axis Bank, Bajaj Financial Services, and PayU. During the demonetisation period, PayU saw tremendous growth in its business. Media companies are becoming a driver of digital services.
There are players such as Hungama, Netflix, HotStar, NDTV, India Today — all of them are making use of Amazon Web Services (AWS). In construction, there is Brigade Group. It is running all its analytics on AWS with SAP HANA. In manufacturing, we have SuperMax.
All of these companies are really driven by the desire to integrate more analytics into their business processes. They are either making use of the existing data streams they already have or creating new ones. We are seeing Indian SAAS companies being very successful in targeting small and medium businesses (SMB). A great example is Hotelogix; it helps boutique and smaller hotel chains by providing them with enterprise grade property management as a service.
We see SMBs in India consuming AWS — for the services that are built on top of it by ISVs (Independent Software Vendors).
How does your pricing compare with rival Microsoft and Google?It would be a mistake to think we are doing (aggressive) pricing because our competitors are doing it. We have always been rather independent (on pricing). If we lower our costs, this can happen from two mechanisms: one, increase the number of customers to create additional economies of scale. The other thing is the way we do innovation in our data centres to reduce costs. These two things work together. Whenever we see increase in efficiencies for ourselves, we lower our pricing.
Additional levels of efficiency in our storage operation (S3) allows us to do these price reductions.
How are you addressing demand for artificial intelligence, voice-driven applications and image recognition?Voice will become the most important interface for digital systems. It is the natural way of interaction. There are large groups in society who are not digital natives — keyboards and screens are not a natural interface for them. How can we build access to digital systems that includes everyone? We see a tremendous interest in the Amazon Alexa and Echo devices. There are three components to those: augmented speech recognition, natural language understanding (Amazon Lex), and text-to-speech (Amazon Poly). Customers can also do image recognition with our service. We have been doing machine learning for a long time and many of our customers are doing it.
