SA rivals can ride Amazon’s cloud

● As Amazon prepares to launch its e-commerce service in South Africa next year, it is fine-tuning its cloud-computing offerings to support massive demand. But its services will be available to competitors too.

This week its cloud division, Amazon Web Services (AWS), during its annual Re: Invent conference in Las Vegas, announced a series of enhancements to the services that underpin its e-commerce platforms.

AWS was originally conceived as a more effective way to ensure that Amazon’s internal IT infrastructure would be up to the demand for its service, which was accelerating at the turn of the century. It has since become the IT backbone for Amazon, as well as globally distributed clients like Netflix, Uber and Airbnb, and is the largest cloud provider in the world.

The original AWS cloud-storage system, called Amazon Elastic Compute Cloud, or EC2, was built in Cape Town, partly due to its architecture being proposed by former Capetonian Chris Pinkham, a South African internet pioneer who joined Amazon as vice-president of engineering in 2001.

Now AWS will also be the backbone of Amazon’s e-commerce service in South Africa, says Jan Hofmeyr, AWS vice-president of EC2.

A former South African now based in Seattle, and an engineering graduate from Stellenbosch University, Hofmeyr first worked for MultiChoice before leaving the country to join Microsoft. He became executive vice-president of the Comcast cable service before joining AWS last year to oversee its “compute” activities.

“Amazon retail is one of our big customers and runs on AWS,” he told Business Times on the sidelines of the Re: Invent conference. “As we support Amazon retail ecommerce some of those AWS services become available to everybody.”

AWS CEO Adam Selipsky, during his keynote address, announced a new service called AWS Supply Chain, which was initially built to support the logistics of the ecommerce service.

It helps businesses increase supply chain visibility to make faster and more informed decisions, while improving customer experiences. It allows businesses to observe their operations in real time, find trends more quickly, and generate more accurate demand forecasts that ensure adequate inventory to meet customer expectations.

“To get a complete view of inventory in your supply chain, you need to build custom integrations,” said Selipsky. “Many AWS customers have asked us whether we can take Amazon supply chain technology and AWS infrastructure and machine learning to help them with their supply chain.”

The service is relevant to South Africa beyond Amazon’s e-commerce service. As same-day delivery becomes an expected norm rather than an exception, the logistics sector in the country has come under enormous strain.

AWS has drawn on 25 years of Amazon’s supply chain experience to offer customers a unified tool.

“When businesses inadequately forecast supply chain risks — such as component shortages, shipping port congestion, unanticipated demand spikes or weather disruptions — they face excess inventory costs or stock-outs that cause poor customer experiences,” said Selipsky.

“Without real-time context, businesses rely on outdated information or best guesses that make it difficult to respond effectively to unexpected issues.”

In a sense, said Hofmeyr, this would level the playing field for other retailers wishing to use AWS services in South Africa. Among others, Pick n Pay recently migrated its IT infrastructure to AWS.

“When the e-commerce service runs in our AWS regions, it accesses optimum resources, exactly the same way that any other customer will access it. It looks to us just like another customer. But AWS was kind of born in South Africa and, as that business started growing, it became an opportunity for the retail business to start running and leveraging it.

“When we build AWS services that support them, we have to build from day one for massive scale. That’s an amazing customer for us. We have to make sure we have enough capacity to support this scale. We make sure that we can forecast capacity. That’s the only thing we constantly think about. Do we have enough capacity to support such customers coming in?

“Our system is ready for Amazon in South Africa. They just have to deploy their services.”

As we support Amazon retail e-commerce some of those AWS services become available to everybody

Jan Hofmeyr AWS vice-president of EC2