There is no shortage of startup accelerators in the technology space. Y Combinator and TechStars are probably the most well known. There are so many around these days. They provide seed money (and human resources in form of connections and networks) to experiment with your next big tech idea. Sometimes these accelerators are also known as Startup Incubators.
But I am not going to talk about the startup accelerators that we all in the technology world have come to know. I want to talk about Amazon - the biggest technology accelerator and perhaps the most important startup accelerator of all.
Amazon started life as an online bookstore, but soon diversified and went on to become world’s largest online retailer. Around 2002 it launched AWS its cloud technology platform and started its journey as a technology provider. This transformation from an e-commerce business to a technology provider is in itself quite staggering. One look at AWS list of products and services tells you the entire story. It is one reason that I really admire Jeff Bezos but perhaps thats another blog.
For now I want to stick to Amazon’s AWS - the platform that powers most of the new startups coming out of the valley and elsewhere. Interestingly Amazon’s AWS played an important role in President Obama’s reelection as well.
Here’s a quick Wiki note about what AWS is-
Amazon Web Services (abbreviated AWS) which was launched in July 2002 is a collection of remote computing services (also called web services) that together make up a cloud computing platform, offered over the Internet by Amazon.com
For startups, AWS provides a comprehensive technology stack to help take your idea and build it into a side or weekend project. Using the stack you can go to the next level and take that side project and build into a startup. And if your startup is a hit, you can build on that success and make a company out of it, again all using the same AWS stack. It is quite incredible if you really think about it — how the Amazon platform enables company of any size to run its technology in the cloud. It is credit to Amazon and the platform they have created. The idea that you never have to buy any physical hardware to run your technology business is quite powerful. It’s the number one reason that cost of starting a technology business has come down significantly which is enabling so many startups to experiment with their ideas with much less capital. Much different from late 1990s and early 2000 when most startups were buying expensive Sun or Dell hardware to bootstrap their businesses.
What is even more impressive about AWS is that it has helped create other successful platforms. In fact it has created a whole new category of platform providers also knows as Platform as a Service (abbreviated PaaS). Some of them that come to my mind are - Heroku and Dotcloud to name a few. Heroku which has been immensely successful among the startup community got sold to SalesForce early 2011 for a cool $250 million.
It is also interesting to see that its just not the startups but some of the more established technology businesses have also made a switch to AWS. A good example is Netflix that made the switch somewhere in late 2010. This means that Netflix is not buying expensive IBM, Sun or Dell hardware anymore to meet its technology needs. It does not get any more disruptive than this.
Also important to note is that some of the existing enterprise technology providers like IBM, Oracle, SAP are offering their software and solutions on top of the AWS platform. IBM is doing that in the form of WebSphere, Tivoli, DB2 line of products. There’s Oracle’s offering in the form of its popular Oracle database and now SAP is offering its latest talk of the town database HANA on AWS. It works great for the software enterprise vendors since they are still essentially selling software licenses. In fact, I think Amazon is the IBM of the new technology business. Except that it is providing technology solutions & services much more efficiently by leveraging the cloud and definitely without the sales force that most of the enterprise companies have. Nothing personifies this better than AWS’s latest offering - Redshift. This is Amazon’s answer to expensive Data Warehouse software/hardware stack that is sold by enterprises for tons of money after many cycles of sales calls and price negotiations. The thought, that a company of any size could have its own Data Warehouse platform at a click of few buttons is incredible. Amazon is accelerating technology for companies at a pace never imagined before.
Coming back to startups, some of the most well known startups - Instagram, Foursquare, Airbnb, Pinterest all have scaled their businesses by leveraging Amazon’s cloud platform. They went from thousands of users to millions, by running their technology on AWS. It is important to point out that Amazon is not alone in the cloud infrastructure business. It has few adversaries in this space - Rackspace, Joyent come to my mind and many startups do leverage their platform. But Amazon definitely stands out by offering a wider spectrum of services in the cloud.
There’s no doubt that Amazon’s platform has been a game changer for startups. It has enabled companies to think, implement, deliver products and internet services at a much faster rate and at much less capital than what was possible before. For technology startups and established businesses alike it is the most important accelerator.