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Executive column: Cloud giant plans Indonesian expansion with investment in skills
Jay Carney (AFP)Over the past three decades, Amazon has grown to become one of the largest firms in the world
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Jay Carney (AFP)
Over the past three decades, Amazon has grown to become one of the largest firms in the world. In the realm of technology, Amazon is now one of the big four tech companies along with Google, Facebook and Apple, with massive reach and wealth. In the United States, Amazon captures nearly half of the US e-commerce market, with sales reaching a staggering US$258 billion in 2018. The company’s cloud arm Amazon Web Services (AWS), meanwhile, holds dominance in the market with a share of 33 percent. Last year, the business brought in $31 billion in revenue for the company.
But as the company’s dominance continues to grow, it has been met with resistance from many governments in the world. In the US, opposition from community leaders in New York City forced the company to abruptly drop its plan to establish a second headquarters in the city. Earlier this month, French lawmakers voted to impose taxes on US tech giants, including Facebook and Google.
Partly to deal with this challenge, in 2015 Amazon hired former Obama White House spokesperson Jay Carney to be its public policy and communications chief. He quickly rose through the ranks and is now one of Amazon founder Jeff Bezos’ trusted aides. He is one of only two remote members of Bezos’ exclusive S-team, the 18 most senior executives who work closely with the CEO, along with Amit Agarwal, the head of Amazon India.
During his four-year stint at Amazon, Carney has not granted that many interviews to the media, but last week he agreed to sit down with The Jakarta Post’s Made Anthony Iswara and M. Taufiqurrahman in Jakarta shortly before kicking off an AWS event here. “Don’t tell this to reporters in the States,” he said early in the interview. He then spoke about the company’s plan in Indonesia and his love for American indie band Guided By Voices. Below are excerpts from the interview:
Question: Cloud computing through AWS has recently been facing resistance around the world. Do you see this as a global trend? And how does Indonesia differ from that?
Answer: At Amazon, our view is that we focus obsessively on our customers and in doing that, we ensure that customers get the best possible experience. That helps us when we then are scrutinized by governments, elected officials and regulators because we can demonstrate that we always deliver value, convenience and low prices.
We know that because we are a large technology company, we will be looked at and will be scrutinized by the government. And that’s fine, it should be that way. In the current environment, when governments are looking at tech companies and trying to figure out how they fit in the broader digital economy, our approach is to advance between the traditional economy and the digital because digitalization is happening throughout the world.
Given all these challenges, what is AWS’ policy to handle them?
Our teams in Asia and elsewhere are making sure that we get policymakers to understand our business model and that our businesses are built around empowering other businesses to succeed.
Small businesses in every state in the US, for example, get access to customers through our store and those businesses are growing twice as fast. For startups, they don’t have to invest in data centers or hardware; they can leverage that capital to invest directly into innovations. They can “pay as you go” for the computer power and storage that they need. That enables startups to move and grow very quickly.
Everything you see is exciting right now in technology and it is driven by cloud and how cloud enables artificial intelligence. And that almost infinite scale that cloud allows gives power of storage and data analysis for the smallest companies, the biggest enterprises as well as government agencies.
The expansion of Amazon in Asia has also probably taken China into consideration and its rise in cloud technology and e-commerce. It also has a huge cloud presence in Indonesia. Do you see this as competition? And how do you deal with that?
In all of our businesses, there is a lot of competition, so there will be no shortage of winners.
But we got a fortunate head start in cloud computing. A lot of foresight came from Amazon founder Jeff Bezos and other leaders who saw the value of cloud very early before many people did so we have been around in the US since 2006. When Jeff was in Washington and he was giving a talk, he said that usually in technology, when you innovate and create something new, your competitors will match or copy you within one year or two. For cloud, it was five years for some reason before competitors woke up and brought the same kind of services. That has been great for our customers. It enabled us to have the time to scale and [earn] the reliability that we think is best in class around the world. That’s what we are trying to bring to Indonesia.
What have been the particular challenges that might hold Amazon back in its expansion to Indonesia?
What we see Indonesia is also in a lot of other places, including Europe and the US, which is the skills gap. The demand for skilled workers in information and communications technology (ICT) is so intense that most important thing we can do for Indonesia is to partner with government agencies, with educational institutions to empower hundreds of thousands of Indonesians with the tools that upskill the min technology. In 2030, a recent study showed that there will be a 9-million shortage in ICT workers for Indonesia and we’re committed to helping address that challenge. That need for such skills is true everywhere and it is even more intense in Indonesia.
Besides upskilling Indonesia’s manpower, what are some of your other business targets or priorities for the country?
We don’t disclose the numbers in terms of investments, growth or revenue. But we’re very optimistic about Indonesia’s potential, so that’s why we announced in May that we are making investments in the region as well as what we are announcing today that will empower Indonesian people with much-needed skills.
What are some of the disclosable agreements that you have made so far for the expansion?
We are not disclosing where the region is or other supporting details because it is one of our policies as well to not disclose them. But we’ve been working with some ministries such as the Ministry of ICT as we have been supporting them through their digital scholarships. We are also experimenting with the minister of education on how we can inject our programs into their curriculum and work with some institutional schools in East Java. We are also working with our ecosystem partners because we are seeing that our Indonesian customers need the support to not only help and understand the technology, but also for the ecosystem partners and businesses to speed up the technology’s implementation and pass it down as their culture.
Going forward, where is AWS going with all of these challenges and opportunities?
Five years to 10 years from now, we don’t know the innovation you might have between now and then as well as what new businesses that might be involved in. But what we do know now is customers will always want more convenience, value and operation excellence. And if you put the customers first in all of your planning and work backward from it, you will likely find innovations along the way that are very rewarding for the future.
