Yesterda, (May 28, 2010) Amazon hosted a seminar title 'Future of eCommerce' presented by Brian Valentine, SVP of eCommerce Platform (http://en.wikipedia.org/wiki/Brian_Valentine). The program was held in the gala room of Regency 1 at the ITC Windsor. Attended by a moderate crowd of about 50-70 people the session was quite interesting.
Shamik and I attended the session. Since we're from Akamai and have been working on a few areas related to eCommerce, the presentation itself was not very interesting for us. It was more about the potential of business opportunity, the market size and the avenue for growth in the online retail world. By the time the presentation came to an end, I'd started to get a few doubts that maybe we'd not made a good decision in attending the session. And then things got interesting..
In the Q&A session, two things stood out: Amazon does not consider itself as an online retailer. Rather, it is a technology company. Retail is just one business division. The online platform (or 'plumbing' according to Brian) is what they're trying to build. This is the sprin board from which they can launch a multide of business, markets and expand. The goal for the platform is be able to have a global scale web services, pay as you go model, support any device and if possible, provide a complete business solution and not a piece meal platform support. Web services is the enabler that moves a business from being local to global.
Someone asked a question if users would trust the platform. For example, if a commerce company sells books, would it trust Amazon to be truly deliver the same performance benefits that Amazon, the retailer gets. To this Brian replied rather philosophically that as a platform company, Amazon has to treat each of its customers akin to children. As a parent, Amazon cannot favor one over the other, so seperation of 'church and state' should exist to ensure that the platform is not misused to gain benefits to the reatail business by penalizing the other customers.
One thing that stood out is the focus on the 'trust'. Brian simply said that bulding trust is a very hard thing. Amazon has to repeatedly show that it was true in providing a platform against any biased opinion that Amazon, the retail company would jeopardize or harm the SLAs for other customers. And he said that was a hard task that and trust can be just lost in minutes if there is a misuse. It was quite amazing on the number of times the word 'customer service' and 'customer trust' kept coming up in the whole presentation and the chat we had with other Amazon folks.
Post presentation, we had a brief chat with architects of EC2, the cloud computing platform by Amazon. I asked them that the model of Cloud computing was that Amazon had built huge data centres for handling rush traffic and was offering this excess capacity during the off-peak season. Suppose a retailer were to use the EC2 and has the need for higher scalability, won't they be impacted as their peak traffic would coincide with Amazon's peak traffic time (Christmas, Black Friday). To which, the response was that there are a lot of different geographies where the peak load is time-shifted and many others where the peak traffic is at a totally different time (consider India and US peaks - different festivals etc). And finally, there is a whole bunch of users who just need compute power and not really a guarantee of performance SLA (researchers running batch jobs). It is here that cloud has typically benefited. However, the future would be to ensure guaranteed SLAs for paying customers. A paying retail customer would be no different from Amazon's retiling service.
An eye-opener to us was the abilty of Amazon to bet big. Amazon kept stressing on the importance of web service. We later learnt that the whole of retail platform is designed as Web services and uses the same set of APIs that any other external user can use. Quite amazing that Amazon could take a call to first follow what it spoke of using Web Services and then cannibalizing its retail business by opening the very same APIs to everyone - including potential competition.
Finally, we had a nice dinner talking a very enthusiastic Amazoner. She has been at Amazon for 10 years now and told us some really interesting anecdotes on what it feels like to work at Amazon.
Overall, a very nice Friday evening and a day when Amazon realized that Akamai is a head-on competition in many areas. So watch for the goliath then!
