Web 2.0 Summit: Jeff Bezos

Jeff gave a great presentation and Q&A with Tim O’Reilly this morning. Highlights follow. Quotes are paraphrased and parens are me.

  • “Amazon has 61M customer accounts, $10B in sales, 7 countries of operation, 35 categories, and 1M+ seller accounts.”
  • “We have three business: a customer-facing one, a seller-facing one, and a developer-facing one.” (Last refers to Amazon web services.)
  • “We have 200,000 registered developers.”
  • “Amazon Simple Storage Solution (S3) lets you store data at 15 cents/gigabyte/month.”
  • “Amazon Elastic Compute Cloud (EC2) lets you use computing at 10 cents/hour … so for $70/month you use one server continuously, or because it’s elastic, 700 servers for an hour.”
  • “There is a huge amount of undifferentiated heavy lifting, which we call “muck,” in between a idea and a successful product.”
  • “We believe creating new products today is 70% muck and 30% new idea execution. We want to reverse that ratio.”
  • “I’ve always believed that high-volume, low-margin businesses are more defensible because they don’t have a [soft] underbelly.” (So do I, unless you have a monopoly or high switching costs.)
  • Tim O’Reilly: “a platform beats an application every time.”
  • “S3 and EC2 and the Alexa web crawl all converted our fixed cost into someone else’s marginal cost by buying access to what we have on a per-drink basis.”
  • “We have fulfillment by Amazon in Beta right now. Using web services you can indicate you’ll ship something to us, we will store, and we will pick/pack/ship to who you want when you want.” Tim: “kind of an S4 … simple, solid, storage solution.”

(This is pretty cool when you think about it. My big wonder is why it’s not all working better — the idea strikes me as visionary much in the same way asI thought next-generation vertical search providers would build on the Alexa web crawl, but it doesn’t seem to have worked out that way. Frankly, I’m not sure why. Some of it probably relates to the direct relevance of the crawl itself to vertical search — e.g., blog search requires a high-frequency crawl aimed at specific blogging sites.)

  • “Electricity is not the dominant cost in running server farms … non-utilization is. What most companies do with their data centers is like buying a 747 and leaving it parked on the runway 83% of the time.”

One response to “Web 2.0 Summit: Jeff Bezos

  1. Pingback: Web 2.0 Summit: Jeff Bezos | Kellblog « Social Computing Technology

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