“Where the spending growth came from? The dataset above lets you break down spending into some standard categories (e.g. healthcare vs. infrastructure). Did specific categories booming or was it growth across the board?”

1. It took Amazon quite a while to understand how developers work. Transparency and openness is still a problem for them. Their PR organization is outstanding at what it does, but is very, very heavy into message control. As a result, crises that spin out of control on Twitter and require instantaneous customer response (as is the case with most developer-related crises in this day and age) take several days to resolve themselves because of Amazon’s unfortunate emphasis on controlling the message vs. informing the customer. They still haven’t fully understood the importance and relevance of Twitter as a customer communication vehicle, for example.

2. Conversely, they are an extremely agile development organization. As you mentioned, they are a very lean organization. So, while that does limit them in terms of the magnitude of features they can take on, it helps them considerably in taking on smaller challenges, executing, turning around, and executing some more. I’d guess their development organization is 1/4th the size of Microsoft’s comparable efforts, yet they will consistently out-execute Microsoft at a 4x pace (if not more) in perpetuity. This speaks to both Amazon’s strengths and Microsoft’s glaring weakness.

3. The retail legacy most certainly impacts AWS in unforeseen ways. You’ve no doubt heard quite a bit about their little crusade against state sales tax. Well, if a state rules that if Amazon has a presence within its borders it will have to collect sales tax, Amazon.com will damn well avoid the state. This is a constant pain in the neck for Amazon employees and an unproductive use of executives’ time.

Overall, though, AWS is one heck of a machine. I adore their product and can’t imagine starting a company on anything but AWS. Whether they get success with enterprise developers and can find a way around Microsoft’s lock on the corporate developer’s desktop is something I can’t predict. But for us startup types, it’s AWS all the way.

Good point and one I meant to mention. AWS has other issues but no confusion about the importance of developer care and feeding. I assume that is because it isn’t an extension of the retail business, unlike the various App Stores. Hopefully some of the AWS mindset can be transferred.

What is your perspective, having been inside AWS?

It is hard to believe the market puts almost a 50% premium on a dollar of profit from IBM, who are a no-growth financial engineering company.