Ben Gilbert: evaluation

Transcript context

…In the pre-cloud infrastructure world, you installed your software, your codebase, on your servers that you owned. The amazon.com codebase was literally installed on a bunch of boxes that they owned. You couldn't just rent out the capacity. Until 2000, they were servers from Digital Equipment Corporation (DEC). They were DEC Alpha servers. These were unbelievably high margin servers that, I believe, leased from the manufacturer. It was the same business model that IBM had forever and Oracle has or had forever, where you get this highly bundled hardware and software platform that you would use to run your applications. They would make 80% gross margins on these things. There's a massive markup. They were monolithic. To be honest, the thing that really changed all this was Linux. When Linux came out and you could do the stuff that you used to need Unix workstations for on an open-source operating system, then everything changed, because you can go buy a whole bunch of different hardware, put Linux on it, and then write your own applications. This laid the groundwork for maybe infrastructure doesn't have to be as insanely expensive. All the profit pools from all of this infrastructure don't have to be captured by (say) a DEC, an oracle, or an IBM. This would lay the groundwork for a lot of things to come, including, frankly, just saving Amazon as a company. In 2000, they almost went out of business because they were so tight on cash. They were spending so much on infrastructure that this moved to the open-source ecosystem and doing a massive rewrite of all of amazon.com to run on Linux and—they did this big deal with HP—run on HP servers. Right, rather than DEC.…

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