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Amazon CTO: Enterprises will 'die' if they don't adopt a start-up approach

Enterprises need to adapt to customer demands if they are to survive, says Amazon

Enterprises need to adopt a start-up approach to product development or risk losing out to more agile competitors, according to Amazon CTO Werner Vogels, with cloud computing fundamental to enabling business flexibility.

Speaking at the Economist's Tech Frontiers conference in London Vogels said that cloud computing can help enterprises quicken the rollout of new software products to meet customer demand by enabling greater experimentation with new services.

"Enterprises can take a lot of lessons from how young businesses move really fast in delivering services that consumers really want," he said. "They do this by bringing a minimal viable product into the market and experiment, then working closely with customers."

Vogels highlighted the success of the Telegraph Media Group, one of the world's oldest publishing groups, which found new ways to monetise its fashion content by integrating e-commerce, with customers able to purchase through a site developed and hosted using AWS EC2 servers.

"Within three months they had a really winning business, but they did not know if this was going to be successful or not so they launched it in a really simple way, and quickly iterated it with their customers to drive it in the direction that they wanted it to go," he said.

"What is important here is that you have to reduce the cost of experimentation. One of the biggest drivers behind the reduction of cost was the cost of cloud computing."

He added: "One of the principles behind cloud computing is that it helps customers reduce waste. Waste is anything that does not lead directly to customer value, any time you spend that is not directly focused on the customer is wasting time these days."

According to Vogels, the greatly increased customer choice across many sectors means that all enterprises need to become more agile or risk losing customers.

"It is about survival. If you don't do it you will die. Maybe ten years ago it was the case that companies had a long term relationship with their customers, and the next generation of your product would go to the same set of customers. Now you buy an app and a few days later you find an app that does it a little bit better.

"The people who have grown up with that way of thinking about software and services, they become the new leaders in the industry."


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