Twenty-seven years to the day from when he founded Amazon in 1994, Jeff Bezos last week stepped away as CEO and handed the reins to Andy Jassy, who has led Amazon Web Services (AWS) since its inception in 2003.
What this means for the future of AI at Amazon remains to be seen, but based on Jassy’s track record, AI is likely to become even more infused throughout the company’s operations, its service offerings via AWS, and its many initiatives.
Amazon is clicking as a business, surpassing $100 billion in quarterly sales for the first time in February. Its challenges are many: the company is being examined by antitrust regulators in the US and abroad; it is facing pressure from lawmakers who say it should focus on being a better corporate citizen; its employees routinely express grievances about working conditions and in some sites have pursued joining a labor union.
The site opened for business on July 16, 1995, with a homepage greeting users with the proclamation “Earth’s biggest bookstore,” with one million titles and low prices. Within a month, Amazon had sold books in every US state and 45 countries worldwide.
Doerr Recalls Early Days of Amazon
“I remember flying up to Seattle to visit the company in its offices at First Avenue, opposite a free needle clinic in a pretty seedy part of Seattle,” stated John Doerr, an early Amazon investor and chairman of venture firm Kleiner Perkins, in an account from CNBC. “We built these tables out of desk doors that we purchased from Home Depot. We went online with a very fast website and could deliver all the world’s books in a shorter period of time at better prices than anyone else in the world.”
Jassy joined Amazon as a marketing manager in 1997, shortly after graduating from Harvard Business School. He launched AWS as a separate business in 2006. He saw that providing infrastructure services on top of the Amazon cloud platform could be an opportunity. Jassy was named the division’s CEO in 2016.
“The man who wrote the business plan for AWS navigated the meteoric rise that has seen AWS grow into a $45 billion dollar company that throws off the vast majority of Amazon’s operating profits,” stated Dave Vellante, co-host of theCUBE, in an account in siliconAngle. “He gets deep into the technology. Anybody who’s seen his two- to three-hour keynotes knows he has a really fine grasp of the technology across the entire stack.”
Jassy has been motivated by using technology to create value for customers. “Jassy’s not a climber, as they call them in corporate America,” stated John Furrier, the other co-host of theCUBE. “He’s not a person looking for political gain, he’s not a territory taker. He’s a micromanager, he loves details and he likes to create customer value. That’s his focus.”
The growth of AWS has tracked with Jassy’s understanding of the company’s business approach. “When you applied the Amazon shipping concept to cloud computing, it was completely disrupted,” stated Furrier. “They were shipping code and services faster, and that became their innovation strategy. They out-announced their competition by a huge margin, they introduced services faster.”
AWS is the Leading Cloud Service Provider
The growth in AWS has been dramatic, with the unit generating $45 billion in revenue in 2020, compared to $26 billion from Microsoft Azure and $6 billion from Google Cloud, according to Vellante, who is a former senior vice president at IDC, the computer analyst company based in Framingham, Mass. Some are speculating that Amazon might spin off the AWS business, but Vellante does not think so.
“I think it’s less likely. If you think about Amazon getting into groceries or healthcare or financial services and the IoT opportunity, they can bring in the cloud, data and AI and go attack these new industries. I would think Jassy of all people would want to keep this thing together,” Vellante stated.
Jassy’s path to CEO is similar to that of Microsoft CEO Satya Nadella, who had run the company’s Azure cloud business. At the Goldman Sachs Technology and Internet Conference held in February, Jassy said he does not agree with the notion that the company suppresses competition when it moves into a new business area, according to an account in CRN.
“There’s this folklore mythology around if Amazon launches a business in a certain area, it means that all the other businesses in those areas are not going to be as successful,” Jassy stated. “I just haven’t seen it.”
The only two significant industries that Amazon has “disrupted,” according to Jassy, are retail with Amazon.com, and technology infrastructure with AWS. He made the remarks in a context of federal and state regulators conducting antitrust probes to determine whether Amazon and other technology giants stifle competition and innovation.
“In both cases, they were models that were pretty antiquated, and customers weren’t so happy with those models, and somebody was going to end up reinventing them,” stated Jassy. “It turned out to be us.”
Scarcity of AI/ML Experts Fuels Market for Pre-Built Cloud Services
In a comment about his vision for the future of AI, Jassy spoke of the industry’s need for more qualified talent. “Today, there just aren’t that many machine learning and AI expert practitioners out there, and a lot of them that exist live (inside) of the big technology companies,” Jassy stated. “Collectively, more and more are getting educated, but it’s part of why in AWS, a lot of the services and capabilities we’re building there are to enable more companies to take advantage of that promise.”
In 20 years of working with the technology, Amazon has now extended AI and machine learning everywhere in the business. Product recommendations on the Amazon.com retail website are fueled by AI/ML, as are the “pick paths” used in Amazon distribution centers to find products and fulfill customer orders. Other areas include Amazon’s Alexa virtual assistant, Prime Air drone initiative and its Amazon Go convenience stores.
“It’s deeply embedded in all of our businesses and all of our capabilities, and yet we still have tons more ideas,” Jassy stated. “We see it as kind of being three macro layers of stack.”
The bottom layer he described as for expert machine learning practitioners—“of which there aren’t that many in the world”—who are comfortable building their own models, writing the algorithms and training and deploying the models. “And you have to keep running those models over and over again, or they become stale,” Jassy stated. “We provide lots of ways to use all the popular frameworks, and we build chips to make it faster to do training and to do inference and predictions.”
In the middle layer of the stack, Amazon has made AI/ML more accessible to developers with for example SageMaker, the fully-managed ML service, which enables developers and data scientists to more easily build, train, and deploy ML models. “Intuit now trains their fraud models in less than a week, when it used to take them six months,” Jassy stated. “These are big differences in what you can do. “
The top layer of the stack is for customers who want to plug into a pre-built AWS model and get answers through application programming interface calls. Applications such as turning text to speech and translating it into different languages can be enabled this way for example.
“Those are those services at a top layer that companies are really hungry to just plug into models from companies that are doing it in scale and have that data,” Jassy stated.
Let’s see where AI at Amazon goes from here, with the creator of AWS running the show.
Ongoing improvements to information technology (IT) have opened new opportunities for businesses to increase their revenue stream over the past few decades. These new areas of focus are altering business strategies, bringing IT to the forefront, and placing more responsibility on the role of the Chief Information Officer.
The Changing Role of IT
Over the years, IT has changed from an expensive new fad that businesses were forced to experiment with to a powerful business driver. IT continues to evolve, helping to grow revenue and shape business strategy. As a part of that evolution, the role of the Chief Information Officer has also changed.
Today’s CIO has a seat at the decision-making table, helping to develop strategies, draft policies, and increase revenue. This is occurring through a shift from IT as a cost center toward a creator of value. This shift utilizes digital transformation, leveraging big data, the cloud, and other hallmarks of IT to create novel business models that drive revenue and meet long-term goals while ensuring quality operations.
How IT Increases Revenue
IT is driving revenues for companies by providing tools to make the following innovative improvements:
Increased complex problem-solving: better hardware and smarter applications enable stronger information research and big data analysis, with resultant improvements to scalability planning.
Better decision-making abilities: Improved IT allows for solid market research through video conferencing, social media, online industry forums, and web-based surveys for consumer feedback. Powerful digital tools for analytics allows for data interpretation and stronger, more informed decision-making.
Improved marketing: Sales depend on reaching the right customer; predictive technology makes personalized marketing possible, and high-tech analytics provide feedback about the effectiveness of the marketing strategies, enabling real-time pricing shifts to maximize revenue.
Upgraded customer support: Complex and powerful customer relationship management systems help businesses support their customers through a variety of platforms, including emails, webinars, phone calls, and social media platforms.
Enhanced resource management: Cloud technology allows employees to access their enterprise-level software from any device in any location, improving productivity and, ultimately, the bottom line.
How IT Affects Corporate Strategy
Business strategies are shifting to maximize the revenue-driving power of IT. The revenue-generating CIO will consider the following strategic issues:
Capitalize on mobility: Cater to the continued mobile platform growth by increasing the value of mobile apps for customer service.
Embrace the Internet of Things (IoT): Employ data analytics to harness and utilize big data resulting from the IoT.
Actively collaborate: A key collaboration between the CIO, with expertise in information infrastructure, and the Chief Marketing Officer (CMO), with access to a bank of customer data, should focus on transforming big data into growth and revenue opportunities.
Experiment with Artificial Intelligence (AI): AI use can reduce cost and increase productivity, and its efficiency is growing exponentially stronger. As a revenue-generator, AI’s power analytics can be harnessed to turn big data into understandable and usable business information.
As technology continues to improve, the role of IT and, by extension, the role of the CIO will continue to evolve and become even more critical to business success. Cost-saving and improved productivity is not enough to provide strategic advantage anymore. A company that can harness and leverage. IT’s revenue-generating possibilities will see improved bottom lines well into the future.
It’s hard to believe that businesses that were fortunate enough to survive the pandemic are now facing another calamity. The labor shortage or wage shortage (depending on where you stand) could cripple the economic recovery efforts of the US as we head towards potential runaway inflation. The latest Consumer Price Index (CPI) is at 5 percent with no end to rising prices.
America’s Work Ethic
Do others around the world see Americans as lazy, entitled teenagers pining for a better allowance? As of May 3, the World Health Organization states that the US was leading other countries in vaccination rates, while other countries like India continue to suffer. Talk to business leaders around the globe, and they’ll find it laughable that America is now “held hostage” by low-skilled, low-wage workers.
Frustrated business owners are left to wonder why those sidelined during the pandemic aren’t rushing back to work. We are experiencing something historic that goes beyond “lazy and entitled Americans.” Three factors are driving the labor shortage as census data comes out:
Low labor force participation rate at 61.4%, according to a February report by the Bureau of Labor Statistics.
Covid did not cause the labor shortage; it did, however, accelerate it. There’s no simple one solution answer, such as raising the minimum wage to address these challenges.
It’s Not a Labor Shortage, It’s a Wage Shortage
Solve the labor shortage by raising the minimum wage to $15 per hour. Big corporations like Amazon, Costco, and Best Buy have taken steps to address this. However, most of America’s makeup is the small business owner who may not afford such a drastic increase in wages.
This philosophy (coming from heartfelt intentions) can hurt both the business and the worker. For example, a dishwasher making $10 per hour is now demanding $15 per hour. That’s a 50 percent increase. Being fair and equitable, that business owner will have to offer a 50 percent increase across the board. Now, the kitchen manager making $20 per hour will be asking for the same 50 percent increase at $30 per hour.
Other expenses for the business owner come with a significant wage increase, such as unemployment insurance, taxes, and worker’s comp. Businesses are now raising their prices triggering, massive inflation rates. As prices increase, many of these workers fighting for higher wages may not afford these products or services as the CPI continues to climb.
Bend, Don’t Break: AI-Driven Technologies to the Rescue
As a 50-year-old, I remember the Carter years – parents complaining about inflation and long gas lines. Back then, technological advancements weren’t available to help businesses. Artificial Intelligence, often defined as the ability for a computer to think and act like a human, has been democratized in recent years and can serve as a tool to help companies address acute labor shortages.
The labor uprising goes beyond just retail and restaurants. While we see AI-driven digital menus like iOrder, the landscape industry innovates with Graze, the AI-driven lawnmower. Both platforms help address the lack of available workers and improve margins decimated by rising labor costs. In 2017, McKinsey released a study that indicated that by 2030, 30 percent of jobs could be automated with intelligent robots.
Covid unearthed systematic and societal issues with low-skilled, low-wage workers that need to be addressed. In the meantime, businesses will need to look at ways to keep both labor and prices in check- after all, they are the job creators, and these workers on the sidelines will eventually have to pay their bills.
The smart home space within IoT has been a bit of a strange sector for a long time. While it’s the most consumer-facing segment of the IoT industry, it hasn’t really moved very far beyond the early adopter phase into the general consumer market. Until now.
According to a recent report from Technavio, the smart home market is projected to grow by as much as $15.23 billion over the next five years, progressing at a CAGR of almost 18 percent over that time. This is undeniably good news for smart home device manufacturers and IoT ecosystem providers like Amazon, Google, Apple, etc. The expansion of the smart home, including beyond the walls of our homes and across our neighborhoods, will raise new challenges and present new opportunities for intelligent wireless connectivity providers.
Future of Smart Home Design
One of the most common obstacles to smart home adoption has always been the perception that it’s hard for consumers to set up and maintain. In the white paper “The Future of Smart Home Design,” ease of use is identified as a key driver of successful implementation. The paper states that an intelligent smart home can learn the occupants’ patterns and preferences through both observation and inference and as instructed by user rules and other inputs. Those, combined with the system’s observed data, enable smart homes to independently make decisions without additional human input if permitted to do so. A person should only have to oversee or potentially override the system’s decisions as exceptions.
One key enablement technology that eases the challenges for both connectivity and bandwidth is Edge Intelligence. In the same paper, it is suggested that artificial intelligence and machine learning capabilities can be brought into edge devices to accelerate and improve the complex functions, analytics, and protocols in a fully operational smart home. Making the challenge curve even steeper is the rapidly increasing number of devices being added to home networks as homes get more connected. Mainly, the increased latency between data collection and decision-making drives the demand for intelligence at the edge.
AI should be working in both the edge devices and in the hubs and gateways to enable smart home implementations best. These devices need greater local computing and storage resources than ever before to support advanced automation and analytics. An important aspect of component selection for smart devices is how many supporting vendors the silicon manufacturer has brought together. The more comprehensive the options, the more efficient a system can be.
IoT security has long been an issue for smart home adoption, and now, privacy is also becoming a key concern for consumers. For the smart home – and the IoT as a whole – to scale, security issues must be addressed at both the OEM and the network levels. In addition, the market will need to educate consumers on how they are being protected from breaches in both areas.
Security threats evolve, so smart devices must evolve as well. IoT device makers should prioritize the inclusion of hardware and software security features that prevent counterfeit devices from using public device IDs to pretend to be an authentic device, have unique device ECC-based public/private keypairs on-chip and through a certificate, and have preventative measures so bad actors cannot hijack code to gain remote control of devices.
These are just a few of the challenges that face the growing smart home market, but the opportunities embedded in overcoming these challenges are vast. Smarter homes mean more energy savings, a more secure home, less time spent on chores that are now automated, and an overall higher quality of life.
For a deep dive into the specific strategies and skills that can help you develop smarter, safer, and more efficient smart home products, make sure you register for the upcoming virtual conference Works With by Silicon Labs. Works With is ideal for software developers, hardware engineers, product managers, and IoT business leaders, offering technical, hands-on workshops and market development strategy sessions.
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