Bloomberg Studio 1.0: AWS CEO Adam Selipsky
Jeff Bezos shocked the world when he stepped down as CEO of Amazon. Less shocking was his choice for successor. Andy Jassi was not only one of his longest tenured lieutenants but the architect of Amazon's multibillion dollar cloud business. Amazon Web Services a moonshot that helped transform Amazon into not just e-commerce but enterprise juggernaut. Jassi then needed to find his own successor tapping a former colleague who helped grow NWS in its earliest days but had since left to run Seattle software giant Tableau. His job to continue the reinvention of a W.S. and intern Amazon. Joining me on this edition of Bloomberg
Studio 1.0 new AWB CEO Adam Slipstream. You worked for a W S for eleven years and then went on to become CEO of Tableau Software in 2016. Then you get a call from Amazon to come back and run NWS as CEO. Tell me about that call. Well I was having a one on one at a prior company and my Apple News alerts went off like everybody else's did. And Jeff Bezos has taken on a new role and just is taking on the C your role of
Amazon. And of course Andy and I worked shoulder to shoulder about 20 feet apart for 11 years. So of course I reached out and congratulated him and we started talking and the conversation turned to some of the possibilities. And next thing I know a little while later here I am back at Amazon absolute delighted and honored to be the CEO of NWS and helping to shepherd this this amazing business for our customers. In that process did you talk to Jeff as well. Yeah I had some communication but it was him principally with Andy who of course was new the head of U.S. business best and of course has taken
on the CEO role. But yeah there was no contact as you might expect with a small handful of other people. So why did Andy tell you he wanted in the next chapter for us. Andy reminded me nothing and needed reminding but that it is really still day one for eight of us and for our customers. It is still so early in this business and we shouldn't think that just because the business has grown rapidly or just because we're currently the leader in in the cloud that it's anything close to mature. And so he really reminded me that we have to stay hungry innovate as quickly as we ever have done in the past year about half a year into the job. What changed while you were gone that surprised you.
Well I think that so many more customers have really adopted the cloud and really decided that they're going all in. So I'm a pretty decent sized business when I left. But it's really grown and the customer base has really expanded. And so now we have very deep relationships at the CEO level the CIO level across every country every industry every use case. And we're regularly interacting with the most senior people at our client organizations. So you were working at RealNetworks. Yes. In the early 2000s. And I understand you were offered a job at a W us without even really knowing what it was. I guess AWB was in stealth mode. What was very secret. So it was it was it was it was hard that the company didn't want to talk too much about it.
But of course you know we had to talk a certain amount about it. 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 although I confess I didn't fully understand what that was all about. So I came in and started talking to Andy and a few of the other senior leaders and eventually to Jeff. And I would have to say that even by the time I took the job I thought I mostly understand what they're
talking about. And it sounds like a good idea. And I'm in. But I also was like well you know we'll just have to see how it goes. And and you know Amazon is a big big place. And so I think we've got a lot of lot of intent to succeed here. And that's the thing that impressed me was Amazon really had the desire and the intent and the belief that this could be a really good business. ATV ISE comes out of stealth mode and is the first to market with a cloud infrastructure service in 2006. How important was that first start. And and do you think US still has an advantage today because of that. I think the time to market advantage that we had which was probably honestly five to seven years headstart before other companies really started to take this seriously was an enormous. Frankly it was just one of the biggest things that happened to us in the early
years because at the beginning a lot of people didn't get it. I would get asked a lot in 2006. So what does this have to do with selling books. And I had a slide with kind of a pile of books on it and a question mark next to it. And the answer was it has nothing to do with selling books but the technology which enables us to sell books being global being at a massive scale being secure or being low cost being highly performance. All that technology has everything to do with offering these types of services externally. Now NWS is in a scrappy startup anymore and you do have big rivals even though the U.S. is still the leader. Microsoft and Google are big rivals. How do you make sure that being big doesn't slow you down. That's a great question because we are currently the leader. And I mean depending on which third party you look at. We're probably a
little bit more than twice as big as number two. And it's really important to continue to act as if we're insurgents and to be insurgents and. To start to act like incumbents and I like to talk about actually managing the business. We want our senior leaders to be managing product and managing customers. And I think as you get bigger and you put more and more layers into your company it's all too frequent. You start managing math. You start managing ratios and percentages and growth. And I think it's a real disease. If you if you stray away from really focusing in a deep way on the product you're building and in a deep way on what your customers are telling you. And so we try and organize both with our org structure as well as just with
our culture and what we choose to focus on and really making sure that everybody is thinking about one or both of those two things product and customers. And if you keep even the most senior leaders engaged that level then also you maintain the urgency and you keep acting like an insurgent. We've got to feel that urgency every day. So keep acting like an insurgent. That's the motto. Absolutely. And structure yourself and build a culture that allows you to. It's one thing to say it but it's easy to say it but it's much harder to put in place enabling mechanisms that enable you to do so. We focus a lot of effort on those mechanisms. Now do you think the cloud keeps getting bigger and that AWB and Microsoft and Google just get bigger pieces of an ever expanding pie or at some point does it become a zero sum game. And that
site for a market share becomes more brutal and more bloody. Well this is a very large market segment. If you look at global I.T. spend it's it's in the trillions of dollars. I've seen estimates like three trillion trillion dollar. It doesn't really matter how many trillions it is. It's very very large. And we've always believed that this was too good a market segment
opportunity for there really to only be one winner. And sure enough you've seen robust competition emerge and we all compete vigorously. But it is the segment is just growing so rapidly that I think really for us we believe that you know the winning business strategy for a long time to come and I would maintain forever is to focus not on the competitors but to focus maniacally on customers wake up everyday understanding exactly what it is that they need us to build next and then work backwards from there. Back internally to how can we build those things. And if we if we do the best job at building the most quickly the things that are most important for our customers then I'm really not worried about what the competitors will do. You worked 10 feet away from Andy Jesse in the early days. Tell
us something about the Amazon CEO that no one knows but you get me in trouble. But. You worked 10 feet away from Andy Jassi in the early days. Tell us something about the Amazon CEO that no one knows but you to get me in trouble. Whereas you know I grew up in Seattle and Andy coming from New York has this fascination. I don't understand with that with New York sports teams. So I've had to endure that for that for a lot of years. New Yorkers. Yeah. So what are you gonna do. Although
he's you know he's he's I think come come come to adopt some of the Seattle teams particularly the new hockey team the crack in here as he said as he should. Exactly. So how do you expect Andy will be different from Jeff or how has Andy already been different from Jeff. Well I think you know we're all different as leaders. I think it's so important that we it's important that we all bring our own stamp to it and operate within ourselves. I don't think I would be a very good Andy. I don't want to presume but I would assume that Andy wouldn't be a great Jeff because you know just Jeff and his Andy and and I mean. So I think that Andy will certainly bring a great depth of of experience from up us which is you know one important part of the business. And well having operated that business for so long and I expect that
will also give him an opportunity although he was involved in other parts of the Amazon certainly for four for a number of years. We'll be able to bring a fresh perspective to the whole company just as I hope to bring data of us. And I think that fresh perspective is is often helpful. I think just the mere act of change is useful for for the business for customers for employees and just to shake things up a little bit. So I think just a fresh perspective. How will you be different from Andy. Well I think that the world around us is changing so so much that we're going to have to be different. It doesn't matter what
we did yesterday. And right after I joined we actually added two new leadership principles which is very exciting ones around striving to be Earth's best employer. And the second around focusing on the fact that that success and scale bring broad responsibility. And those are things about which I personally am very passionate. And so I really personally look forward to digging in and helping the company to figure out what are those things that we have to figure out where can we innovate to to be Earth's best employer. And then also to figure out externally what can we do to really be great citizens of our local
communities to be great citizens of our national communities and to be great citizens of the global community. And I'm I'm I care a lot about those things as a lot of other people do here. But I plan to put a good amount of energy and time and focus and hopefully help Amazon innovate and all of those areas. How closely do you work with Andy. Day to day. Does he regularly weigh in on NWS decisions or not. Well he's he's got a pretty broad scope of things to worry about now. So he's got a pretty pretty intense day job I believe. So he's really focused across the company as you would expect him
to be. But that being said obviously NWS remains an important part of Amazon. And so we touch base regularly be it in person or via email just on the most important things going on in the business. Does Jeff ever weigh in on NWS decisions. Yes. I mean really from the beginning Jeff was involved at the very very beginning at some of the most fundamental decisions. How do you
price to what's your name as three. What is the detail page look like. Obviously over time we the business grew and but Jeff was always available when we needed him. And I certainly anticipate that will be the same going forward. So is he still available now. And what do you what do you understand that just priorities are. Sure. Well I'll let Jeff speaks his own priorities. But but certainly Jeff has been available when for example we've been doing our annual planning cycle as many companies have. And it's been great to have have Jeff here when on really where we're heading for the
next year and beyond and to make sure it's easy to get focused on the details of the business. And it's great to have multiple multiple people who can help you pick your ISE up a little bit. Now you joined us in the middle of a pandemic. You came back to a W ISE in the middle of a pandemic. That's hopefully moving into the rearview mirror. Madonna is one of eight ISIS biggest customers. If it weren't for the cloud if it weren't for eight of us would we have had a vaccine as quickly as we did.
I've got to tell you I'm ISE but it's been an absolute privilege to for us to work with Madonna because what they're doing obviously is literally lifesaving and they've been so innovative and so creative. So Madonna took a drug development process to get to the to a vaccine candidate. That process would typically have taken them 20 months. And doing that on a W.S. in conjunction with all the. On their side reduce that 20 months to 42 days 42 days to get the vaccine candidate the MMR and a
vaccine candidate four for Covid-19. And those really running on on running multiple parts maddern on AWB. So if you look at the drug design part they had their drug design studio running on NWS all the way to manufacturing with the new digitized manufacturer that they call their digital manufacturing platform. So it's really end to end and the ability to use massive amounts of resources and to pick the exact type of service and capability for four for each part of the job and and to really bring the full set of resources to bear in addition to not having to focus on the idea and the infrastructure and the technology and rather letting Madonna focus on on the all important job of drug discovery. So working in partnership was just magnificent too to see what they accomplished. Since you joined a WAC a number of longtime W W S leaders have moved on to
Microsoft to strive to Tableau. Does that concern you. Well actually retention has been very good. If you look you mentioned the senior leaders. If you look at the the VIP plus ranks the VPN above ranks it at Amazon. The average tenure is is over a decade over 10 years. So it's actually very very strong retention. So of course you're always going to have some level of people coming and people going. And at the end of the day that's actually healthy for the business. You want new perspectives to come in. Of course in the right proportion. Amazon has opened an investigation after 550 employees supported a petition claiming a culture of discrimination harassment bullying and bias. What's the status of this. Well we are
incredibly focused and I personally believe it's incredibly important to really have a very diverse inclusive and equitable environment. And we're going to make sure that whatever it takes that we've got that. So we believe that we're really doing a lot of things to to deliver on that and a lot of innovative efforts around bringing in a diverse workforce which we have to have both because we're going to serve our customers best. They're diverse. We have to match that diversity. And also I just believe it's our responsibility and it's the right thing to do. Any time there is any possibility that things are not something is not gone the way we wanted to we're going to investigate it thoroughly. That's what
we're in the middle of doing in this case. And we'll make sure that we're operating in a way that's consistent with our values. And that's that's always the only goal. If you could rewind to the early 2000s the earliest days of a W us. Is there anything you would have done differently to build an inclusive culture to start with a more inclusive culture to make sure that it didn't become a you know a boys club. Well I don't think that's what we have. I think that we do have a really fun exciting innovation led an inclusive culture. And that being said these are hard problems. Know we I think we've done a lot but we are nowhere close to where we need to be. We're gonna be restless and dissatisfied with our our progress
on DNA just as we are with every other part of our part of our business. Mark Zuckerberg is making a big bet on the metaverse. How big do you think it's going to be. Such an interesting sentence. The metaverse is real. A W.S. has the biggest trove of sensitive corporate data in the world. I'm curious how you think about the balance between data
and privacy and freedom and civil liberties in the modern era. I mean there are governments there are nation states around the world that want that information. Hackers and criminals want that information. Well we're very clear to start with that our first job is security. We often say security is job zero. It was on the first page of our of our operating plan pretty much every
year every year that I can remember. But what about when governments request that information so subpoena that information. Well we were very clear that our customers data is their data. So the data belongs to our customers and not everybody operates that way. We are not going to look at customers data. We are not going to compete against our
customers using their data. Their data is their data. And furthermore we have all sorts of architectural best practices that our customers should be and are using for any sensitive data. And so a lot of that really relies around encryption. And so we build a lot of different encryption capabilities so that any sensitive data which could leak for any reason veto a government bid to a hacker or be it to anyone else. Any form of security breach that it's encrypted and useless to anybody else.
Given the the the broad array of encryption solutions that we that we provide it's actually very doable and powerful for our customers to to safeguard their data that way. Mark Zuckerberg is making a big bet on the metaverse is a debut that's going to have a role in the metaverse. I think everybody else already has a big role in the metaverse. So I think the cloud enables the metaphor. So if you if you think about all of the compute capacity all of the storage all of the machine learning which is
required to create compelling a delightful end user experiences in the metaverse a lot of that is already today running on eight of us. So if you take epic games for example. So Epic runs fortnight massively popular game 350 million users worldwide and epic runs almost everything on a W.S. from back end servers to the analytics and everything in between. So I think that's a great example of that of the metaverse at work and all that's happening today on eight of us. And we anticipate that's only going to grow really rapidly in the future. How big do you think it's going to be.
Such an interesting sentence. The metaverse is real and yet it's virtual at the same time. I think that if we continue to do do what we've always done which is to provide a technology platform that allows organisations to transform then these gaming and entertainment and social media and other other companies will be able to do what they do best which is to focus on innovating on behalf of their end users. And I think that the metaverse in many other areas will will will be rich with inventions. So this next conversation will have will happen in the spheres in the metaverse that that's where we'll next mean that that could be me. I'll meet you in the metaverse. All right. See you there. Now I know that climate change and stopping climate change and your data center footprint is a big passion as yours. How fast will Amazon's data centers get to carbon neutral. Amazon is already the largest purchaser of renewable energy in the world and where we intend to be 100 percent renewable energy by the year 2025 we'd originally set 2030. We actually accelerated that by five years to 2025. That's part of our broader climate pledge that Amazon created and to which we've now gotten two hundred other organizations to sign on to. And the climate pledges to be
a net zero carbon by 2040 10 years ahead of the Paris Accord target. So we know how to do some of that. Other part are going to require invention but we really look forward to it. And I think it's one of the most important things we can do for that for our generation. Amazon counts some of the biggest oil and gas producers as its customers. Isn't that a contradiction. Should you be kicking them off your platforms. Those customers are trying to get to sustainable business models which rely on new energy sources. And so many of those customers are figuring out how did they get to wind. How do they get to solar. How do they get into batteries. All new business models relying on renewable energy. And I think
rather than abandoning them and having them maybe dig in more on on fossil fuels. If we can enable them to move faster to be more innovative and to be more agile in figuring out new business models new technical solutions experimenting failing fast and moving on to the next next idea. Then the whole world will get to the renewable energy solutions that we need at this year's Reinvent Conference. It'll be the first time that Andy Tassie is not giving the keynote. You will be. Give us a preview. What can we expect to hear if we're going to a lot of really exciting announcements. So I think across our service portfolio you'll see that we have a lot of exciting partner announcements. Partner ecosystem still remains to this day. So important to
what AWB is doing. And we have some great announcements lined up for that. And then I think people are going to want to see that we're making it easier and easier for them to consume the cloud and to work with NWS. And so we're going to continue to in addition to building more powerful basic capabilities. We're going to continue to make it easier and easier in a variety of ways to interact with us. Adam Phillips Casey of R.W. ISE thank you so much for joining. Bloomberg has enhanced search on the terminal to deliver what you need when you need it. Now you can simply type phrases in everyday English in the command line compare financials find people analyze markets you can answer phrases or ask questions.
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