In a statement issued on April 18, Amazon China said that in order to seek a strategic transformation, it would stop offering seller services to third-party sellers on Amazon's China website on July 18 this year, but would continue to invest in and vigorously promote the development of various businesses in China, including Amazon Overseas Purchase, Amazon Global Store, Kindle and Amazon Cloud Computing.
In fact, Amazon, known as an e-commerce giant, has made more remarkable achievements in cloud computing in recent years. According to Amazon's results as of December 31, 2018, Amazon's fourth quarter revenue was $72.383 billion and AWS revenue was $7.43 billion, up 45% from a year earlier. The AWS business, which accounts for about 10% of total sales revenue, contributed $2.18 billion in operating profit, accounting for more than 57%, and became Amazon's most important profit pillar.
Recently, during the 2019 World Port Congress in Guangzhou, Zhang Xia, chief cloud computing consultant of Amazon AWS, gave an interview with the 21st Century Economic Reporter to talk about the opportunities and challenges Amazon faces in the Chinese market. Zhang Xia believes that the cloud computing market is full of opportunities, or a blue sea, whether in the world or in China. He also pointed out that the industry is experiencing a lifetime of technological shifting, which is growing faster than anyone expected. Amazon's AWS is developing well in China and will continue to increase its investment.
21st Century: What is the current situation of Amazon AWS in China? During the 2019 Port Conference, AWS talked about enabling cross-border e-commerce. What can Amazon do to help Chinese companies go to sea?
Zhang Xia:At present, AWS operates the AWS China (Beijing) region through its partner Halo New Network and the AWS China (Ningxia) region through Xiyun Data. Our business in China is developing very well. Although AWS does not publish business data in China, some third-party data reflect the development momentum of AWS in China to some extent.
AWS can provide many services to help Chinese enterprises go to sea. For example, AWS cloud infrastructure can guarantee business operation, use AWS cloud infrastructure covering the world to help enterprises deploy applications near users, and use AWS cloud services to help enterprises accelerate business development innovation, reduce costs and initial software investment, so as to achieve a very small business. IT investment started rapidly. In addition, AWS can provide free cloud resources to enable users to quickly verify business models. It can also help Chinese enterprises to connect with global resources such as Amazon Inventor Platform and sell products globally.
21st Century: From a global perspective, what are the new trends in the development of cloud computing industry? Why do more and more enterprises choose to use cloud computing technology?
Zhang Xia:Cloud has become a business enabler and a new normal. Companies of all sizes now default to deploying new applications to the cloud, and want to migrate as many existing applications as possible to the cloud as quickly as possible. In every business area we can think of, enterprises are using the cloud more and more.
The primary reason companies choose to migrate to the cloud is that they can achieve agility and speed. If you build your own IT, it usually takes 10 to 18 weeks to start the server, and if you use the cloud, you can start thousands of servers in a few minutes. AWS provides infrastructure and cloud services that allow users to implement innovative ideas several orders of magnitude faster. In addition, many companies use the cloud because it converts capital expenditure into variable costs. Capital expenditure is lower with cloud than with self-built IT. And the cloud is resilient and can increase and reduce usage as demand fluctuates.
Every vertical industry is being reshaped by companies that are good at leveraging cloud computing and related new technologies. Startups are subverting old industries and creating new ones. Airbnb is subverting the hotel industry. Pinterest is creating visual search. Music. ly is creating short-video social networking. Traditional enterprises have begun to look for the same opportunities to reshape themselves. Many companies are embracing change, using cloud computing to reshape their business, such as GE GE General Electric to migrate more than 9,000 applications to AWS, Motorola to use AWS to reshape itself as a global public security communications platform, and so on.
From a technical point of view, cloud computing leads the development of the Internet of Things, big data and artificial intelligence. At present, the global cloud computing market is developing rapidly. Take AWS as an example, its global and Chinese businesses are growing rapidly. We are experiencing a lifetime of technological shifting at an alarming rate that exceeds anyone's expectations. Because AWS cloud can relieve enterprises and organizations of the heavy work of the underlying technological infrastructure, focus on their own differentiated advantages, such as analyzing PB-level data, distributing video content, building mobile applications, and even exploring Mars.
21st Century: Amazon Cloud Computing is leading the world, but it is facing the pressure of local competitors in the Chinese market. What do you think of this competition? What are the advantages of AWS?
Zhang Xia:Whether global or Chinese, cloud computing market is full of opportunities, or a blue sea. More competition (or even no competition) is the competition with traditional IT companies. Through constant propaganda, more enterprises will realize the benefits of cloud computing and change from inefficient traditional IT consumption mode to cloud computing consumption mode.
In my opinion, the advantages of AWS are mainly reflected in three differences. First of all, we pay great attention to customers. Although many companies say that they pay attention to customers, they really do very little. Ninety percent of our products are because customers tell us that such products can solve problems. Secondly, we are pioneers. Most IT companies have lost the will and gene to invent. Their innovation depends on acquisition. AWS likes to hire founders, pay attention to the missing customer experience, and try to reshape these experiences. We also have a very large community that has a cloud computing vision from the beginning, rather than merging acquisitions. In addition, it is our long-term orientation in customer relationship. We will not appear at the door of our customers at the end of the quarter or a few days before the end of the year, trying to disturb the sales promotion, and we will not see our customers again at other times of the year.
For example, AWS has a support function called AWS Trusted Advisor. Through this function, we can see the utilization of resources by customers. If the utilization of resources is low or idle, we will contact customers and tell them that maybe you don't want to spend the money now. Over the past few years, we have saved hundreds of millions of dollars a year for our customers. Excuse me: How many technology companies call their customers and say, please stop spending money on us? Very seldom. At first, people thought it was a gimmick, but if you know our culture, it's perfectly reasonable.
21st Century: Amazon said it would continue to invest in cloud computing and other businesses in China. What are Amazon's plans to expand its cloud computing market in China in the future?
Zhang Xia:Our overall strategy in China is to work with partners to promote the development of China's cloud computing industry and to serve a growing customer base. In the future, we will continue to empower our Chinese partners to provide reliable, scalable and economic cloud services to our customers. At the same time, we will establish a comprehensive cooperative relationship with cloud industry stakeholders such as partners, research institutions and developers'communities to build a dynamic cloud ecosystem in China.
For example, we will provide start-ups with the resources they need to get started with AWS through the AWS Activate program, and continue to provide free office space and media opportunities for start-ups through the AWS-supported joint incubator and the AWS Joint Innovation Center program. At present, AWS is working closely with the Ministry of Education to help promote the development of China's cloud industry. Through the recent launch of AWS Educate, it helps educators and students to use live cloud technology in the classroom.
(Original title: Zhang Xia, chief cloud computing consultant of Amazon AWS: Cloud computing is still a blue sea, and we are experiencing a lifetime of technology shift.)