The Cloud is giving start-ups the agility to go global fast, says Werner Vogels, CTO of Amazon

Werner Vogels is the Chief Technology Officer of Amazon, one of the world's largest providers of cloud computing services. In an interview with Business Today's Taslima Khan, Vogels talked about how Indian start-ups and small and medium businesses are making innovative use of the cloud.

In your view, what sort of company constitutes a start-up?

I find it hard to say who a start-up is. Is a company like Instagram a start-up? Or Dropbox, given its valuation - is it a start-up? What is interesting is that earlier only younger businesses would have the entrepreneurial spirit, but now many enterprises are becoming way more entrepreneurial than before. We see the entrepreneurial spirit across the board.

How does cloud computing work for small businesses?

Cost effectiveness is not the only factor.  What matters is that you do not need capital upfront. Cloud computing allows them to move fast into the market. Some years back it was important for start-ups to raise four to five million dollars just to be prepared for big successes. Now you see young businesses coming off the ground with just 50,000 dollars. Companies can now use their funds in things that really matter for their business, like developing better products. They need not pour enormous amount of resources into things that do not help them differentiate at all - the IT environment. Cloud computing eliminates the need to put some of your best people to manage your IT infrastructure. If you are a team of five people, all of them can work on building the product, rather than having two of them handle the technology backend.

The cloud is giving businesses the agility to go global. Hotelogix which initially focussed on the Indian market is much bigger in South America than in India.

Will cloud computing make start-ups more successful?

I don't have proof for this, but I think more start-ups will be successful because of cloud computing. With less money, you focus on what is really important for your customer.

Do you find it challenging to deal with younger companies and startups?

No, it is very exciting. Jeff Bezos (the founder of Amazon) has a saying - there are two types of entrepreneurs. First - the mercenaries, who are after money.  Second - the missionaries, who truly believe in the product and its success. At Amazon, we are missionaries. We totally believe in the products that we are developing. Really seeing people's ideas and businesses come to life is just great. RedBus is a great example.  It has inspired others to get into aggregation services like they did with bus operators. The social impact has been great both for bus operators as well as the end users. They focused on the Indian market, but are getting interest from Africa and South America. They are really passionate about their product.

How are start-ups leveraging the cloud here in India?

Almost all young businesses I know do data analytics - collecting data about customers, how they are using products and how they can serve them better. In the past you thought data analytics was something only enterprises would do. Analytics is now playing a more and more important role for start-ups as well. The Lean Startup, the book by Eric Ries is a sort of bible for start-ups today. Start-up business progress has changed, the book says. You don't have to keep working on a product and go for a big bang launch after two years. You don't need to have 10,000 uses of your product to see which ones customers are using. Get the minimum viable product in the hands of customers as fast as you can and then learn how they are using your product. There has to be a rapid cycle of taking feedback on how customers are using your product. Take this feedback in the direction they want the product to go. Businesses need to clearly understand who their customers are.

How can India's large base of Small and Medium Businesses make the best of the cloud, considering they are not the most technologically advanced?

SMB is a difficult world. I don't know where it starts and where it ends.  Most SMBs have less than 20 people. Often they cannot afford to have an IT person. Even if they have one, he is the one managing their PCs and keeps them running. Many of these organisations cannot afford to get a good inventory management system. What cloud computing brings to these people is not necessarily the server infrastructure but the software as a service application that runs on top of it.

Large companies are still plugged into the traditional IT services model. Are they now embracing the cloud?

The current state of the economy with the current state of the rupee, is forcing many companies, including large companies to reconsider their capital investments. But they still need to be successful and competitive in global markets. They need to find solutions that make them compete globally, without having to spend enough capital. Quite a few of them are doing all sorts of experiments. Look at Mahindra. All of their dealer management system runs on the cloud. Companies like InMobi and Vserv are making extensive use of the cloud.

Where have you seen cloud adoption?

It's across the board. We have a lot of media guys using the cloud, though they have their own variation of what they are doing- Tata Sky, Sony Entertainment, Hungama. Also newspapers that are building digital properties are looking for new ways to monetize content.