Virtualization

Venture Capital No Longer Hates Us, Amazon.com's CTO Says

When Amazon Web Services launched a few years ago, the venture capital community wasn't a big fan.

"Many folks in the venture capital community hated us because we robbed them of the opportunity to get to significant chunks of young businesses because now they no longer required $5 million in investment," said Werner Vogels, CTO of Amazon.com, during an event on Tuesday at the Australian Technology Park in Sydney.

Small businesses "could actually launch a viable product with $50,000 and a box of ramen," he said. Startups no longer needed a lot of cash to buy their own servers, sign contracts with software vendors and deal with many of the costs associated with building their own infrastructure.

Several years on, that perception among venture capital companies has turned around, Vogels said.

Venture capital companies now see that the availability of low-cost computing means there are more new businesses and that they "can actually can fund a lot more startups, which means they can spread their risk much more," Vogels said.

Vogels spoke as part of Amazon.com's launch of a program for the Asia Pacific region called "The Lean Cloud," which aims to provide training, mentoring and exposure for startups.

Vogels said AWS has been consistently lowering the cost of its services, keeping its own margins low while maintaining a high-volume business.

Slides shown during Vogels presentation said that AWS lowered the cost of storage by up to 40 percent in February. Last month, some AWS customers saw their computing bills drop as much as 32 percent.

That's good for Amazon, since if costs go down, it's more likely that companies will stay in business, Vogels said.

"We are continuously lowering our costs," Vogels said. "We are happy if you go home with a bill that is lower than this month."

Send news tips and comments to jeremy_kirk@idg.com

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