The way technology services were sold earlier and the way they are sold today has a vast difference. As opposed to the box-pushing approach, progressive technology companies today deeply engaging with customer’s technology, product and business teams to understand the latter’s use-case before suggesting them anything on their application architectures, integration approaches, large-scale distributed systems, or architect advanced cloud-based solutions. This is a more consultative, and collaborative approach then just ‘meet-the-target’ approach.
Amazon Web Services (AWS), with its sharp focus on ‘Digital Native Businesses’ – high profile and fast growing start-ups, and new age companies with predominantly online presence – is taking an even aggressive approach. With its well over 175 services and products, AWS works closely with its customers on their use cases, understand their technical challenges and help them build a robust roadmap to deliver on their business vision. The company helps them architect advanced cloud-native solutions using the AWS platform and handhold them on how to deploy and operate their solutions at scale.
During the AWS re:Invent 2019, I got an opportunity to speak to Navdeep Manaktala, Director & Head – Digital Native Business, Amazon Internet Services Private Limited (AISPL) on many issues ranging from what this concept of “Digital Native Business” is to how they consume and leverage technology differently than traditional companies to how AWS engages with them.
Here’s the first hand, descriptive account of the same:
Top Five Quotes:
Start-ups are technology companies/platforms doing business in an industry domain
Cloud computing is an all-encompassing phenomenon
Most new-age start-up companies and emerging businesses prefer open-source over proprietary software/technology products
AWS works on a Lego-based approach. Customers can pick up and put together pieces that make best business sense
Most business conversations have some element of AI/ML or analytics deployment
DynamicCIO (DCIO): Tell us more about AWS digital native business and how do you classify the companies in it?
Navdeep Manaktala (NM): Digital native businesses are those which are entirely built on the cloud. This essentially consists of mid-to-large scale start-up, and new age companies which have majority of business done online. AWS in India classifies these start-ups and new age companies into three segments:
Digital native businesses, which are mid-to-large start-up in the B2C space
- Independent Software Vendors (start-ups) building software and services (using AWS platforms) for other enterprises (B2B Space)
- Early-stage start-ups and a large pool of SMBs located in various territories
DCIO: In the digital native business, are the needs and business challenges any different compared to the conventional companies?
NM: In the start-up or digital-native space, the consumption of technology and its leveraged is extremely different than the conventional businesses. The latter is dealing with a lot of technology legacy and therefore their pace of adoption and idea of leveraging technology is very different. On the other hand, a digital native business is essentially built on the cloud and there is little or no legacy footprint. Also, they have highly capable technical teams to leverage the technology.
Let’s take an example of Swiggy. The company positions itself as a technology company, which is in food distribution business and not the other way around. Similarly, other start-ups consider themselves more as a technology platform, which operate in a particular industry domain. This results in a very different behaviour when it comes to leveraging technology. These organisations use technology to the hilt in every process, every aspect of their function. Technology is their first choice to address any business challenge.
DCIO: So, how does AWS engage with these digital natives with regards to their entire stack of technology platform?
NM: In today’s world, cloud is an all-encompassing phenomenon. AWS today boasts of over 175 services, which are way beyond just the compute and storage. Apart from the basics, we offer cloud-native databases, analytics, artificial intelligence/machine learning, internet of things (IoT), mobility, security and many other. Analytics alone has approximately 15 services ranging from visualization to data warehousing to Hadoop to ad-hoc query etc. Similarly, AI/ML portfolio has numerous services. It won’t be wrong to say that AWS will have a solution for any requirement that a digital native business could possibly come up with.
For example, if an organisation need a Content Delivery Network (CDN) solution for accelerated content delivery, we have CloudFront. Similarly, if a company wants to track its fleet with an IoT solution, AWS has a solution for it. When it comes to business challenges like creating customer profiling and providing customized recommendations, we have niche AI/ML solutions. A large portion of IT requirements of an organisation can be fulfilled by AWS without going to multiple vendors. You’d be surprised to know that AWS is one of the largest Email service providers in India and also globally. We have an SMS service in India, which many organisations are using.
DCIO: In the beginning, you spoke about the three segments – B2B, B2C and early-stage start-ups. In which of these does AWS has a deep penetration?
NM: All three of them! A vast majority of start-ups in India, irrespective of which stage they are into, are built on AWS. Let’s talk specifically. Almost all large B2C start-ups that one may think of, are AWS users. If you look at any of the large B2B start-up like FreshWorks, Manthan, Capillary, CleverTap, Sprinklr, they are built on AWS. If you look at early-stage start-ups, we have the most active corporate venturing program where we work with these companies. We also engage with University E-cells, Venture Capital companies, PE Funds, family businesses, super angels and co-working spaces – the entire spectrum where the start-ups are nurtured.
DCIO: While the technology intake in start-ups is high and also their outlook towards technology usage is vastly different, there are still challenges that these companies face including financing of technology. How do you see those?
NM: Another noticeable difference between the digital native businesses and traditional businesses is the usage of open source technology. They hardly use any proprietary, license-based technology. With open source, these companies can have more control and flexibility on the technology they use. For example, MySQL is the most commonly used database in the start-up space. They will use PostgreSQL, Maria DB etc. AWS has its own open source-based relational database called Aurora and a NoSQL DB called DynamoDB. We support managed MongoDB.
The second key element of being cloud-native or digital-native means they don’t invest in hardware, which is either not needed or grossly stay dormant. One of the reasons why cloud gained acceptability is the limitation of on-prem infrastructure. When you buy hardware or deploy an on-prem infra, you generally provision for peak load because it is impossible to add capacity on the go. A typical off-peak utilization of an on-prem infrastructure is 10-12%. However, in case of cloud, a company can send requisition and get the capacity during the peak. It makes the organisations more efficient. Secondly, the upgrades and updates, which are a tedious affair, are available unconditionally. Lastly, cloud gives enormous resiliency. For example, the durability of Amazon S3 (Simple Storage Service) in in the range of 99.999999999%. To get a similar durability on-prem, one needs a huge investment. Therefore, the start-ups are smart users of technology and don’t face too many conventional challenges.
DCIO: How does AWS participate in the evolution of start-ups?
NM: Our approach is not that of a typical technology vendor. None of our customers is mandated to subscribe to or charged for anything unless they start using it. They pay for only what they consume. Most of our services are billed by the ‘seconds’ of usage.
Another unique thing about AWS is our ‘Lego-based’ approach. For example, we have 13-14 offerings in the analytics space. But when customers subscribe to analytics, they don’t necessarily have to subscribe to all of them. If a customer doesn’t like (or want to use) our visualization/BI service, they can choose to use some other product. A customer can pick up and put together pieces that make best business sense for them. In the legacy world, users invested in products that they couldn’t utilize entirely and many of the functionalities they paid for were never required or used. The early-stage and lean start-ups don’t have the luxury of large technology budgets and we, as their growth partner, participate in blueprinting their technology requirements and help them choose the right stuff to help optimize the cost.
DCIO: Which AWS solutions have been most popular among these digital natives?
NM: I don’t think there is one over the other. However, if we see the trend over the years, historically, it was largely compute, storage, networking and (to some extent) databases, that were the most popular solutions. Today, we are witnessing increased usage of analytics, and AI/ML. Any conversation that we have today, will essentially have an element of AI/ML or analytics or even both. There is also a growing inquisitiveness about cloud-native databases now.
The AI/ML and analytics help the digital native businesses understand the consumers better. Based on the intelligence and insights derived from these technologies, they can offer immense amount of personalisation and customization to their customers. Machine Learning is also used for automation. For example, the veracity of images uploaded on Shaadi.com today is authenticated by Amazon Rekognition. Customers are using our IoT services to monitor the routes of their fleets, delays due to traffic etc. These technologies, besides being modern, help in bringing the elements of customer intimacy, customer engagement, and automation.
DCIO: On the ‘Partner versus Vendor’ approach, every technology vendor today claims to be the same. How’s AWS’ claim different.
NM: A few things will explain it better:
Firstly, we don’t have anything called a quarter-end or year-end. We don’t chase our customers for their “purchase orders”.
Secondly, AWS doesn’t believe in passing on any other cost of things that the customers don’t use. Customers are billed by the “seconds.”
Thirdly, our account teams have two goals: One is revenue, the second is cost-optimisation. On a scale of 0-100, we measure every customer and how they have adopted the cloud best practices. It is very critical for us to know if they have done/deployed everything that helps them optimize the cost for AWS Cloud. Anything below 40 is a poor score and 40 and higher is a good score. That has its due weightage in any account manager’s performance appraisal. It is very unique to us.
Lastly, we work with customers on specific use-cases. Key is to understand the business objective, and then position the best possible services and implement it.
Moreover, we have also started to interact with the product teams within the user organisation. For us to sell technology or services convincingly, it’s important for us to understand what is the end goal of the customer. What are they trying to build? By engaging with product teams, we also get to know whether or not the AWS technologies or services are capable of fulfilling their objective.
By saying this I don’t mean that technology team(s) are becoming less effective or important. However, by involving the product, marketing and other teams, an organisations gets to better leverage the technology or service they wish to deploy. This is how AWS is more like a partner and not just a vendor.