Amazon.com 2015 Annual Report Download - page 6

About seven years ago, Netflix announced that they were going to move all their applications to the cloud.
Netflix chose AWS because it provided them with the greatest scale and the broadest set of services and features.
Netflix recently completed their cloud migration, and stories like theirs are becoming increasingly common as
companies like Infor, Intuit, and Time Inc., have made plans to move all of their applications to AWS.
AWS is already good enough today to attract more than 1 million customers, and the service is only going to
get better from here. As the team continues their rapid pace of innovation, we’ll offer more and more capabilities
to let builders build unfettered, it will get easier and easier to collect, store and analyze data, we’ll continue to
add more geographic locations, and we’ll continue to see growth in mobile and “connected” device applications.
Over time, it’s likely that most companies will choose not to run their own data centers, opting for the cloud
instead.
Invention Machine
We want to be a large company that’s also an invention machine. We want to combine the extraordinary
customer-serving capabilities that are enabled by size with the speed of movement, nimbleness, and risk-
acceptance mentality normally associated with entrepreneurial start-ups.
Can we do it? I’m optimistic. We have a good start on it, and I think our culture puts us in a position to
achieve the goal. But I don’t think it’ll be easy. There are some subtle traps that even high-performing large
organizations can fall into as a matter of course, and we’ll have to learn as an institution how to guard against
them. One common pitfall for large organizations – one that hurts speed and inventiveness – is “one-size-fits-all”
decision making.
Some decisions are consequential and irreversible or nearly irreversible – one-way doors – and these
decisions must be made methodically, carefully, slowly, with great deliberation and consultation. If you walk
through and don’t like what you see on the other side, you can’t get back to where you were before. We can call
these Type 1 decisions. But most decisions aren’t like that – they are changeable, reversible – they’re two-way
doors. If you’ve made a suboptimal Type 2 decision, you don’t have to live with the consequences for that long.
You can reopen the door and go back through. Type 2 decisions can and should be made quickly by high
judgment individuals or small groups.
As organizations get larger, there seems to be a tendency to use the heavy-weight Type 1 decision-making
process on most decisions, including many Type 2 decisions. The end result of this is slowness, unthoughtful risk
aversion, failure to experiment sufficiently, and consequently diminished invention.1We’ll have to figure out
how to fight that tendency.
And one-size-fits-all thinking will turn out to be only one of the pitfalls. We’ll work hard to avoid it… and
any other large organization maladies we can identify.
Sustainability and Social Invention
Our growth has happened fast. Twenty years ago, I was driving boxes to the post office in my Chevy Blazer
and dreaming of a forklift. In absolute numbers (as opposed to percentages), the past few years have been
especially significant. We’ve grown from 30,000 employees in 2010 to more than 230,000 now. We’re a bit like
parents who look around one day and realize their kids are grown – you blink and it happens.
One thing that’s exciting about our current scale is that we can put our inventive culture to work on moving
the needle on sustainability and social issues.
Two years ago we set a long-term goal to use 100% renewable energy across our global AWS infrastructure.
We’ve since announced four significant wind and solar farms that will deliver 1.6 million megawatt hours per
1The opposite situation is less interesting and there is undoubtedly some survivorship bias. Any companies that
habitually use the light-weight Type 2 decision-making process to make Type 1 decisions go extinct before
they get large.