Long-Term Planning and Innovation From Amazon's Bezos
Long-Term Planning and Innovation From Amazon's Bezos by UCStrategies Staff
Founder and CEO of Amazon.com, Jeff Bezos, is using what he has learned in managing the latter to influence his overseeing of cloud infrastructure provider Amazon Web Services (AWS).
Bezos is keen on focusing on the long term, and states that customers are more attracted to lower prices and great products. Last week, Bezos made a rare public appearance with Amazon.com CTO, Werner Vogels, at the Amazon re:Invent partner conference in Las Vegas.
A long-term commitment to quality, innovation, low costs and the willingness to exist on the margin, regardless of whether you are selling Kindle e-readers or offering data hosting services at the world's biggest cloud hosting company, is paramount to driving strategy.
Bezos added: “If we can arrange things in such a way where we can align with the customer, it will work out in the long term for both the customer and for Amazon.”
One integral part of the company's characteristic is low margins, and this goes hand-in-hand with innovation: “High margins cover a lot of sinners. We've spent 18 years [operating with low margins] so it's deeply ingrained in our culture,” said Bezos.
Twenty-four price cuts have been made since the company was launched in 2002, and the latest was made last week when Amazon.com installed a 25 percent price cut for Amazon Simple Storage Services.
Creativity and experimentation are valued above the pursuit of high-margin returns for his products and hard-charging business executions. Bezos said: “Some people wake up every morning and say, 'What three companies can I kill this year?' That's a conqueror's mentality. We want to attract people who want to innovate, who wake up and say, 'I want to build a great product.'”
Bezos added: “Successful innovation is creating something customers care about.”
According to Bezos, the same spirit of innovation which began with Amazon.com has maintained its thrust in AWS: “AWS is one of those enablers that helps companies innovate faster,” he said.
Thousands of developers are employed at AWS, and they persist in seeking to reduce costs and tune technology in new creative ways to provide more and expanded services; 158 features will be offered in 2012, according to the company.
Bezos, keeping with his continued belief in long-term planning, is planning to build a 10,000-year old clock with a team in West Texas. Bezos says: “The symbol is important. If we take a long-term view we can accomplish things we wouldn't otherwise.” (CY) Link