Thread by @patrick_oshag

I went back and read every reference to Amazon Web Services (with provides things like cloud compute and storage) in Amazon shareholder letters.

I share my favorite nuggets here, which contain lessons for everyone.

It started with this directive:

"Our technologies are almost exclusively implemented as services. Service-oriented architecture -- or SOA -- is the fundamental building abstraction for Amazon technologies."

This reminds me of @Alex_Danco idea that in the future we hire functions instead of objects.

"We’re targeting broad needs universally faced by developers, such as storage and compute capacity—areas in which developers have asked for help, and in which we have deep expertise."

Matching internal strength with external demand.

"Technology infuses all of our teams, all of our processes, our decision-making, and our approach to innovation in each of our businesses. It is deeply integrated into everything we do."

Software is eating the world. Its not until you build some software that you FEEL this.

"Invention comes in many forms and at many scales. The most radical and transformative of inventions are often those that empower others to unleash their creativity – to pursue their dreams."

Investments we’ve made in early stage companies, like @PrefectIO, are tool builders.

"We are creating powerful self-service platforms that allow thousands of people to boldly experiment and accomplish things that would otherwise be impossible or impractical. These create win-win situations and create significant value."

Grow the pie rather than fight over slices

"All AWS services are pay-as-you-go and radically transform capital expense into a variable cost. AWS is self-service: you don’t need to negotiate a contract or engage with a salesperson–you can just read the online documentation and get started"

Internet scale power, both sides

"Trusted Advisor monitors customer configurations, compares them to known best practices, and then notifies customers where opportunities exist to improve performance, enhance security, or save money. Yes, we are actively telling customers they’re paying us more than they need to

"The proposition, “I can save you a significant amount on your annual IT bill and my service is almost as good as what you have now,” won’t get too many customers..."

Don’t get in price wars

"...What customers really want in this arena is “better and faster,” and if “better and faster” can come with a side dish of cost savings, terrific. But the cost savings is the gravy, not the steak."

Look forward instead of sideways

"Once you’ve become proficient at building complex systems with AWS, you do not want to have to learn a new set of tools and APIs assuming the set you already understand works for you…"

High quality & trust + high switching costs = deep advantage.

"If we continue to serve our customers in a truly outstanding way, they will have a rational preference to stick with us."

Customer centricity as core value has served Amazon well.

"Software developers changing jobs, moving from one company to another, become our best sales people: 'We used AWS where I used to work, and we should consider it here. I think we’d get more done.' "

Free sales force

"90 to 95% of what we build in AWS is driven by what customers tell us they want."

An incredible feedback loop which aligns with competitive strength.

Finally, this is all good for business. Even though they constantly drop prices, the economics of AWS are incredible. One of my favorite business case studies of the last twenty years.

/end