Amazon Web Services CEO Andy Jassy says his biggest surprise is 'how long it took' for other tech giants like Microsoft and Google to enter the cloud market (AMZN)

Andy Jassy AWS

Amazon Web Services boss Andy Jassy spoke on Wednesday at the Goldman Sachs Technology and Internet Conference about how AWS had a head start in the cloud industry.
Jassy says he was surprised at how long it took for other technology giants to build a cloud like Amazon's.
Currently, Microsoft and Google Cloud are competing with AWS in the cloud industry.
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Amazon Web Services started offering its cloud services in 2006, well ahead of its rivals Microsoft and Google Cloud – and the head start really pulled the company forward, says AWS CEO Andy Jassy.

At the Goldman Sachs Technology and Internet Conference in San Francisco on Wednesday, Jassy said that because of its head start, AWS's biggest advantages over its competitors are that it has more functionality and a large partner network.

"I think that every major technology company either has or is trying to build some kind of replica of what AWS has built in the cloud computing infrastructure space," Jassy said onstage.

Still, Jassy says he never expected AWS to have the market to itself for such a long time.

"Of the many big surprises, and there have been lots of big surprises, probably the single biggest one for me is just how long it took for other large technology companies to build something that looked like what AWS was trying to do," Jassy said.

'No compression algorithm for experience'

Before AWS started, people thought of Amazon as "just a retailer," said Jassy. Because of that, the company knew how important it was to be the first to start selling cloud services and beat its Seattle rival Microsoft to it.

"We felt like if we didn't get to market first, it would be harder for us to be successful, and Seattle's a pretty small city," Jassy said. "We know a lot of people – or on the other side of the lake, and we were just trying to get the launch without anybody knowing. But we never imagined we'd have a six to seven year head start."

Jassy says that today, the maturity of different cloud platforms on the market right now are in "very different spots." In the early days, AWS had to take some major risks, which still impact how the company makes decisions today, he says.

Jassy brought up an internal motto people at AWS use. This motto is "There's no compression algorithm for experience," which means that a company can't learn certain lessons until "until you get to different levels of the curve and scale." He says AWS was able to learn those lessons at an earlier stage.

"What I always share when I get a chance to speak with customers about it is that, there really only two existing significant industries in which Amazon is disrupting," Jassy said. "One is retail, the other is technology infrastructure, and in both cases, they were models that were pretty antiquated, and customers weren't so happy with those models. Somebody was going to end up reinventing them, and in those cases, it turned out to be us."

'Folklore or mythology'

Microsoft and Google Cloud are racing to gain an even bigger slice of the market as they take on AWS.

Analysts say one disadvantage that AWS has, compared to Microsoft and Google, is that many companies fear the competition of Amazon.

For example, retailers see Amazon as a major competitor, and Walmart decided to use Microsoft Azure.

Likewise, technology companies that built their business on open source service also see Amazon as a threat. Redis Labs, Confluent, Cockroach Labs, and Sentry changed licenses on how their software can be used in response to AWS selling their software on its cloud, or the possibility of it. Likewise, MongoDB and Elastic also saw AWS make competitive moves.

Even so, Jassy dismissed the notion that Amazon will prevent other companies from flourishing as "folklore or mythology."

"I think also, sometimes people have this folklore or mythology around, if Amazon launches a business in a certain area, it means that all the other businesses in those areas are not going to be as successful," Jassy said. "I just haven't seen it ... And so it's because these segments are so large, they're not winner take all. There's room for several companies to be successful."

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