As Amazon prepares to launch its ecommerce 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 ecommerce platforms.
AWS was originally conceived as a more effective way to ensure that Amazon.com’s internal IT infrastructure would be up to the demand for its service that 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.
AWS is the backbone of Amazon.com’s ecommerce service, says Jan Hofmeyr, AWS vice president of EC2. A former South African now based in Seattle, and an engineering graduate from Stellenbosch University, he first worked for Multichoice before leaving the country to join Microsoft. He eventually 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.”
In particular, AWS CEO Adam Selipsky, during his keynote address opening the conference, 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 during the keynote. “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 only Amazon’s ecommerce 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 now drawn on 25 years of Amazon.com’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 other, Pick n Pay recently migrated its IT infrastructure to AWS.
“When the ecommerce 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 any large customer such as Amazon in South Africa. They just have to deploy their services.”