AWS Could Become A $1 Trillion Business

Durable Investments tells us about the current/future state of the cloud business and AWS’s interesting positioning over the next 10 years. 

Show Notes:

01:12 - What is AWS?

03:40 - What did people do before AWS?

06:52 - How is AWS different compared to Microsoft/Google?

12:18 - How are Microsoft and Google competing with AWS considering AWS has a significant head-start?

16:23 - Google and Microsoft’s strategy for acquiring customers

20:36 - Market capitalization of the total cloud market

26:08 - How will the cloud business look in 2030/2035?

27:17 - Biggest constraint to AWS growth

29:34 - AWS is recession proof

33:44 - Future upstarts and disruption 

42:24 - How to approach finance as a technologist?

Find Durable Investments on Twitter -  @retaox

Find Vasanth - @NextVasanth

Find Faraz - @fzfromcupertino

Intro Music: “Pain is the Essence” remix by @AdiSoundsGood on Twitter

Disclaimer: The content presented in this episode is for informational purposes only, you should not construe any such information or other material as legal, tax, investment, financial, or other advice.

Transcript

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Costco sells at a premium to the profits that they're making is because people know that. Even in a recession, people are going to go buy in Costco because they want to save money. Whereas you can't say that to a business like Etsy. When, when people are losing jobs, they're not going to go buy handcrafted items that are being shipped to their homes. Costco would probably see 5% loss in revenues. If we get a scenario of 2008, again, it's, you'll probably see 50% loss in revenues, right. It's not to say that it's a bad business, but Costco is a better business. I think the same applies to the cloud industry. Dribble investments, thank you for joining us. I think, you know, we've been wanting to do this episode for a little while. I have somebody that. S you know, so-and-so expert on AWS, and I think you're the best person. So we have to begin with, if you could just quickly describe what AWS is and what makes it such a compelling business, right. I get asked this questions all the time by people who are not in the tech sector I think Couple of weeks ago. One of my neighbor's mother asked me what is the difference between Amazon and Amazon ups? So it says, I thought everything is the same. Right. But the simple explanation is I think it goes back to the history. Amazon started as. Right dialer and asked they started selling books and they expanded their inventory to CDs, music, other items and the number of customers increased the amount of data they housed within their business. Exponential increase, right? The customers increasing the products increased. Lot of traffic means a lot of compute and they. They had to invent a lot of technologies to scale to Amazon, as a people with an Amazon call it Amazon scale. And once they achieve the scale, someone came to Bezos and be like, Hey, why we have achieved this scale? We can either keep it as a secret sauce, or we can actually make this technology available for others, for other people to utilize it. And then we can. Make a business out of it and base of like, that's a beautiful idea. And I think in 2009 they found AWS 2008 where basically they launched easy two, which is the compute service that AWS provides. And basically at that point was basically a commodity type of business. Right. Any, any. Moment Bob shop to any major retailer can post their website on AWS silvers. And they don't have to worry about building their own data centers that that's how it'll get started. And right now we just not that anymore. Right now. It'll be much more, it's not just a commodity company. You meet in your computer servers kind of a deal. It is a, it is a soft, it is an enterprise that has a distribution muscles too, all over internet. That's how I would describe it. I just wanted to ask a question about that. So I built a, I built a few things using AWS and it was incredible to me how quickly it was, how easy it was for me to come up with this idea, write it in node, JavaScript, and then launch it. I can't even fathom of what the world looked like before that. Do you have any insights? Right. I wasn't really like I think back in 2010 or so when I started building my own obligation, that's exactly my experience. Right? So you write code doctorals that hosts of up silver, and then you write business logic on top of it, and then you actually have to And every single competent of the whole stack, right? You have to spin up, you have to go find a separate entity that hosts your DNS. You have to go find a separate entity that holds your URL assets, the CDN cache, everyone, everything you have to know of being a full stack developer was such a pain. Before it will be a C like, even if, even right now, if you're a full-stack developer and you're not using any of these integrated solution, it's not easy at all. There's so many things that you have to have in your mind. I think one of the core monsters of Amazon is making E-Trade. It's straight away, the smallest of inconveniences that the customer house, that's kind of how Amazon's core mantra. Right. And I think it really started chipping in and automating the smallest things that the developers do. And then with 12 years of engineering, it has come to a point where if you want to. Create a software solution, not just to upside like a software solution, you can pretty much do it with a two pizza team. Right? So I think the two pizza rule that Bezos had kind of aligns with AWS. That's why the two pizza team actually works. If you think of it, not many people talk about this. Anyone can say that, oh, we are, we are go with lean mechanisms and we have to be can be more than. Nine or six people. Right. But it is not that easy if you don't have all of your base infrastructure obstructed away by, you know, your own DevOps being AWS, it's not easy. Like I've worked in companies where teams like about 25 to 30 people. Work on a single segment of the whole software stack. And then this is one I'm talking about one product, which is being worked on by about 10 sub teams. And each team has 20 people and each team takes care of being digital component. And you can't, those types of those types of organizations are slowly moving out too. AWS and Azure, and it enables them to just go with the, see the unit of just 12 people or 10 people, and they can build the whole solution. And because you have the DevOps by you. Okay. No, you can ask her anything and he is there to give you the solutions as generic as possible. So it has, I've started away a lot of complexities. That's how I do it. This as one of my friends told me, AWS is my personal DevOps. Right. That's how most people, yeah. So I think, yeah, that's, that's when I first learned about that, I think that's what sort of struck me. You have the explicit cost of having to just hire a lot of people to work on the, you know, each component or you can go to AWS. That's like the explicit cost. Obviously the implicit cost is all the things that were not being built before, just because people could not afford to build them. And so I think that is maybe the greatest thing that AWS has sort of given to the world. You know, if you, if you have to discuss, and I think, I think I'm glad you brought it up that it was sort of brought around in 2008, as you look at the AWS competitors. And I'm sure there were a lot of differentiate differentiating factors that AWS had back then, but what are the core differentiating factors that AWS has now when compared to Google or Microsoft, et cetera? The core differentiating factor is their products. If you ask me just because they are the first entrant they have almost anecdotally speaking five, four to five different products that achieve the same thing, but different offs. Right. Let's say, let's talk about compute here with AWS. If you want to run an application, being computer go, I'm calling it compute. You can either do it. And by buying an easy two instance and hosting application, there are, you can spin up a Lambda and Landa can quickly go do its thing and close it. Or you can do it. And and Beanstalk obstruction, which takes care of your easy to and pro obstructed with somethings for you. Or you can use a faggot service, like a plaster was transit application in a contract way. Right. I'm just, there are at least three more in there. That does the same thing, but each one has a different trade-off and this, this kind of, this kind of empowers the customer to say that to basically choose have more robust choices. Right? So any decision, like any CIO and CTO, when they make a decision, whether they want to go with AWS, Azure or GCP almost always, no one regulates choosing AWS because the old adage of last year, right. No one got fired because they chose Oracle or IBM. Right. It's the same thing, right? Just because of the fact that they've been here for a long time and they've been actually trading away or at these features on and on and on again, they are have a very robust set up products that they have. I think that's the number one. Competitive advantage. If you ask me the second is the community that I've built around, that I could go stack overflow. If you look up the tags for AWS, Azure and GCP you would find about actually that you would find about 9,000 pages worth of posts for AWS for Azure and 2000 pages per GC. And that's probably a good proxy for the amount of community and engagement you have. Right? So in this commute, it actually, it, it might not sound like a lot for people who are not in the industry, but it is a big deal for for a software engineer when he's trying to Try out a prototype and he knows that he can go ask a vague questions or refer the questions that are already been answered. And that's a huge deal. This even just making the decision, whether someone wants to use an AWS technology with us, let's say some of the solutions people tend to, okay, let's do this because it has higher stuff. Right. So that's number two. I would, I would call it and the other competence are easily replicable and already replicated. For instance, if it takes support, it used to be able to support was kind of best in class. They have dedicated teams that have, that are rightly incentives. To minimize the number of tickets that come to them, that they're actually incentivized to reduce costs for the customers like AWS customers actually tell you, you should do this, but it support. Sorry, would actually tell you, you should do this to reduce cost. You will not hear that anywhere. Right. Like any listeners will be like, oh, do you want to use this extra feature? Right. But sales people do that, but it really supports incentives actually said to reduce costs for you, solution architects. It used to be that it'll be as hard, one of the best supportings, but I think it was a GCP or uptake game. I don't think it's a competitor, a competitor advantage anymore. I just want to add that. I think. Azure and GCP are going to be as good of a businesses as AWS. I just know it'll be very deeply because I worked with hands-on. I I just want to second what you said about community. So like for the various hacker hackathon type projects that I've built that involve AWS tutorials and stack reflow answers are my number one determinant. I do not want to spend a month. Of, of lead time to build something I want to spend like three days. And in those three days, I want to build a proof of concept, at least. So that is by far my biggest determinant for choosing what technology I use. And AWS is just a, no brainer from that front. So how can Azure and Google cloud possibly compete if AWS has such a headstart, both in terms of what their offerings are, but more importantly, what their community. I think they are already started chipping away. They just, they just need to start follow the playbook. Microsoft is so good at replicating others products. I mean, it's not a surprise, like if Microsoft school business and it's basically replayed replicating other people's innovation and they're very good at it. And they've done that beautifully, right. As there has been an existence for 10 years. And it's, it's not, no one has the dates to move to cloud anymore because. Microsoft Microsoft's person. So Microsoft actually made it, made a Mindshare from customer's perspective that in moving to cloud is not a bad thing. Like we can deliberate go because Microsoft is there, right. Microsoft has that kind of Mindshare. And I think it has almost like 10 years from now. I wouldn't be surprised if AWS and Azure are how equal market. And GCP right behind that I would not be surprised at all. And they just have to need to follow the playbook that it will use how it's set up. And I think both of them would, would be just fine and B any other and new entrance that they are thinking to come into the school space that is not going to happen in my mind. That's it, the, the intubated scope. In my opinion, there are a couple of people that I am for the sport, right. For OCI, Oracle OCI is I am for that spot. Like Oracle is probably has the cash flows to actually make it happen. But I doubt it because just because of the fact that or to have lost its luster people kind of view it as old school. And I know that's, that's still to be decided, but. The intermediate into heart hyper scaling witnesses closed outside of China, these three are going to be the only layers. I, I did a calculation sometime I go, but I don't have that almost with me right now. The, the CapEx, the capital expenditures that Amazon Azure and GCP have spent thus far. Would sink a country like Argentina, but that's right. That's the amount of money they have to put into this do bring to the scale and only cash gushing businesses can afford to do that. No new player. Can you and I cannot go sit in a garage today and say, that'd be going. Compete with AWS and no VC can support that kind of money. Either only businesses that are actually gushing cash out on it. They're like, we don't know what to do with this. And we are going to buy with this cash towards this. And that sort of happened with Amazon. Like with Amazon, that's not the case. Amazon was, was actually unprofitable for so long. Because of the money though, that they have to spend on AWS, if not, I think retail personally, I think retail would have started showing free cash flows. In 2009, not saying that's a good thing, but I think all the cash that was coming from retail was just straight up going to Catholics for AWS. Right. And also came up, explore Amazon retail, but for Google the S. The amount of free cash flow that the generating from Soche, it's just straight up going to Cemex of AWS, right? the GCP and same with Microsoft, but they've spent so much for the past 10 years and only Azure and AWS are making profits right now. Google is not making profits. I think it will take another couple of years. So. Spending that much money without taking profits for 10 years. Not many countries can do it. Let alone country companies. So I think these are the only players in my mind that going to be in this space. So our Google. So what is, Google's play Google and Microsoft play to gain market share. Are they trying to migrate AWS customers or are they going after the market who hasn't even gone to the cloud? Yeah, th this is white space. They are just going with whites, less exploration. So with that, it'll be a, no one is competing with each other right now. They're just, no, I mean, they are competing at some level, but. Looking at schmoozing CEOs and CTOs, and they're showing how much that they can save and how much they can improve their productivity. And they're just going after the old school basically the non-tech part of SMP 500. If you think about it, it's not in a cloud right now and they're just going out to the market, right. When I say, like, imagine American airlines, Southwest airlines, Nordstrom, ExxonMobil container store, you know all these people. They're just going out to the whites because I think the statistic is not even accurate at this point. I think the statistics somewhere around 20% market penetration. Yeah. People can't even judge because no one knows how, how big that spaces, but I'm I'm estimating about, you know, sound of a percent penetration rate in another 10 years. And most people would come to the realization that having their obligations on in cloud is much more Beneficial for them than doing their own their own private clouds. There are multiple reasons for it. I can tell you, I can tell you a simple example, like from the customer benefit, right? It's from customer standpoint, it's very straightforward in their head. I don't want to name names, but there's a healthcare company. And it's mandatory as a healthcare hospitals, software solutions company that I worked for before. And this company has been onboarding. Customers, you know, left and right, right. Like when I say customers, hospitals, hospital solutions that relate to technical technological hospitalizations, and it's an old school company and they have the old data centers obviously. And the bottleneck is whenever they have to add a new customer, they need to build a new data center to house the extra day. Right. Like either they have to add new CPU's because the clusters we're not scaling like every like, like administerial level, the, the jobs were failing because the clusters couldn't sustain that much amount of data. So they need to add extra notes, but they don't have space in the same data center to access the extra nodes. So they have to do extensive. Their data centers or build new data centers to add new customers. So imagine the amount of bottleneck that it provides for operations. Like if you can, they could only, they have the capacity to onboard 20 customers a year, but they can only do 10, but once they move to a cloud provider like AWS or Azure, they don't, they're not, they don't have this bottleneck anymore, even though they end up spending the same amount over the long run. Right. If you are monitoring the initial spending and you do a net present value and whatnot probably will come to about the same money, but they're, but where they win is the productivity gain. They don't have to wait two years to onboard 20 customers. They just have to do, they can do it as fast as they can. And in, in technological space, that's a huge advantage, right? No one is going. Profitability straight up, everyone is going for market share. And because in technology in it, that is the most important part. Like it's, it, it lends itself to be a winner-take-all kind of space and it's a huge benefit for customers, but that alone is a no brainer for customers and customers are going to, in my opinion, any new software solution that existing Non-tech S and P 500 companies are going to bold. I think they are going to wisely choose to just put it in cloud. I think most of them already decided to go that way, if you, if you could sort of ground this conversation and numbers, cause I think you said we have currently 20% market penetration between all the cloud providers. Eventually, maybe in five to 10 years, we have 75% market penetration. What does that mean in terms of dollar. Sure. I'll go those numbers. So we can do this calculation either way. We can either go from the global GDP and backtrack. To what would be on the cloud town, or we can look at the current businesses and I'll play kegger on top of it and see where they are. We can do both. Let's go from the global GDP route, right. Right now in 2021 2020. The global GDP is 113 trillion and we apply a 6% projected kegger to disclosure, GDP assuming 2% inflation, three per person productivity gains. You will end up with$180 trillion worth of global GDP. That's every S and on the side and$80 trillion. If you assume that. Any big, any industry? APR seem that 5% of the industry's spend are going to come from it maintenance and that very well is the case. Like if you go look at statistics even agriculture industrials are spending 5% of their spend on it at this point. And it's only going to grow on automation, right? Like you can think of even the smallest things like irrigation, automating the irrigation part. That's an, it. Right. If any, any sort of automation is going to compromise the span. If you have him 5% of that, that's going to be$9 trillion. Right? So 20,$39 trillion of global GDP is going to be on, it spent to be precise and of the$9 trillion. So now we are talking about automation and software and it companies and hardware companies, right? This is the, this is the industry space that we are right now. General heuristic, if you take usually take any companies the gender, like if you look at the expenses about 80% will be their employee base. 20% probably is their backend infrastructure. That's a, it's a Pennsylvania heuristic that I would like to date. It probably is more if you asked him 20% oh 9 trillion, that is$1.8 trillion. And then$1.8 trillion is the, is the money the world is spending on it infrastructure. And now this time. Is includes private clouds and public clouds, hyperscalers, and, you know people who decide to have their own clouds. And you assume by 20, 30 scientific person or the people on public clouds and 20, if I choose to still choose to have their own clouds but that penetration, you are looking at 1.3, two. And if you assume let's say that I'm wrong and there is one more new enter the space and the top five players only taking up some 20% of the one, 1.3 trillion that I'm talking about. That's$1 trillion. So the top five players, including the two from China are how in cumulation are making$1 trillion in revenue. Right? And if you look at the first day, Right now it's about 50% AWS right now in 2021, 40%, AWS, 30% as you're about 10, 10, 5, 3% the remaining. Right. But obviously the smaller players are going much faster than AWS and Azure. And if you are seeing. It reduces loses market share and they are 30% by 2030, that would bring the revenues to$300 billion. By 2030 and$300 billion. If you put a free cashflow margin on top of that, that will be$60 billion. To give some context, all of Amazon makes$30 billion in free cash flow in 2020. So it was a loan would make twice that amount of free cash flow by 2030. If my assumptions are right. Yeah. If you go back. So, so this is a reverse engineering plan the global tab, right? But if you see how feasible it is from the current revenue numbers on, on an annualized basis, it'll be places making$55 billion in revenue in the past 12 months. And so 55 billion to 300 billion revenues. So that comes to somewhere about. 21 person, or if I'm not mistaken someone can correct me. But it's one day, one person kegger as right now is growing at about to T one person. I think last quarter was 35%, but they're growing at about 30 bucks of giggle right now. So even if you assume the first four years are going to be, you know, From somewhere around 30% to failing to 15%, they'll easily make 21% and that would get there. And I think they will get there. Same with. As their material, if you have saved 30%, I mean, if you have simply let's assume that as it is 25% they would be going a little more faster, but I think they'll get there in my opinion. Do you think though that the clouds of 2035 will resemble the clot that we have today? Or could there be something which completely changed the orders of magnitude? There's something that I think everyone needs to keep an eye on by 2030. I don't think anyone them, anything fundamentally would change given the incentives of people who are involved? No one wants the underlying infrastructures infrastructure to change. If they are already spent so much money, right? Every single player wants the same infrastructure. They, people change adopting just one lead. They see clear incentives. With the newer chain, right? That's why people who are have their obligations in their private data centers are moving to AWS because they're seeing a clear incentive to move right now. There's nothing in the horizon, in my opinion. That can be an upstart, but. There will be something for sure in the next 15 years or so. I don't know what that's going to be. Anyone who is enlisting technology has to keep an eye on these things for sure. One advantage that you have is that new thing might very well be coming from these three players I was just saying that on your note about hyper scaling and Amazon growing at 30%, I'm sure as you're, they're all growing at a similar rate, what is the biggest constraint to their growth? I was just reading an article recently that Amazon is having trouble finding the requisite talent to maintain this growth. Do you think that is the biggest constraint or do you think there's some other big constraint? I think Tyler. Is certainly a problem. The, the first five years of growth, I think they were able to achieve with much less head count. But right now the industry they're employing more than 150,000 people. The top three players alone, more than 150,000 engineers are not engineers, kind of 2000 people, right? It does include sales. This includes several people who are in the data centers. I think they are figured out a way to attract new talent. I think the trouble. Is going to be keeping the quality as they grow into the scale. One of the biggest risks, in my opinion for hyperscalers is losing trust. The biggest stress that's what happened to take Oracle, right? Customer started losing trust in Oracle. Once they realized that Oracle is not scaling, it's not performing to the level that they thought that Oracle products do. Almost Oracle became synonymous with, you know, sluggishness, slow. You are. Right. So, but, so that's one of the biggest things. So they have to keep on innovating and pushing the boundaries to sustain this growth or else something else is going to be an upstart. That's number one. And security is second biggest risk. If customer starts seeing hearing news from everywhere that, oh, there's a data breach here. And apparently it's from Azure or GCP. They start having this mind share of unreliability and it will be very hard to sell to new customers. That's going to be the second biggest hurdle. But if they are able to maintain these two basically when I say these two, I mean reinventing themselves, number one basically the day one culture that basis talks about and the second one being wonder bus and attention to security. I think that'll be fine. Sure. You know, I, the other thing about AWS that I wanted to touch on, I know previously you've mentioned, so the recession proofness of the business, can you speak a little bit about that? Sure. Any investments that as an investor you make one of the first things that to look at as downside production, correct. One of the reasons that Costco sells at a premium to the profits that they're making is because people know that. Even in a recession, people are going to go buy in Costco because they want to save money. Whereas you can't say that to a business like Etsy. When, when people are losing jobs, they're not going to go buy handcrafted items that are being shipped to their homes. Costco would probably see 5% loss in revenues. If we get a scenario of 2008, again, it's, you'll probably see 50% loss in revenues, right. It's not to say that it's a bad business, but Costco is a better business. I think the same applies to the cloud industry. Yeah. If companies are struggling to make revenues. The first thing as a CFO would look at the airline items and say that, Hey, we are to go lean. We should probably let go of some people, or we should let stop spending on new ads. We should stop spending on expansion. Those are the places that they will cut their money. The last place that they would cut their money on is to strip their website away. They need their website up and running. No matter what the businesses say, you are a restaurant Thai restaurant that that is going through Solutionary period. You will, you know, the go people first, you will do anything. But the last thing that you will do is Stopping for your website whoever is hosting your upside, right? And ultimately all of this trickles down to being managed by hyperscalers and ultimately it goes to themselves. They are almost like utility. In some sense you will not cut your water. Supply. Water will be the last water bill will be the last place that you would stop paying. Right? So it's almost like a utility in the, in some sense. And I think. Hyperscalers would cruise through a neuroception every period. And also one other thing to note is they know that they are in this power position and they don't abuse it. They usually give leeways to the customer because they know that the customers need their help. They usually just like in old landlord gives moratorium doing coordinate. COVID-19 hyperscalers say that. It's okay. You don't have to pay us for you know, so on silly if you're struggling, but then, you know, you have to pay us when things are getting better and they would, they all, they always provide because scenarios like that, because at the end of the day, the customer's success is hyperscaler success. They want every single one of their customers to succeed. Phenomenal. Right. Do you, do you think Amazon does that? I know you mentioned this earlier, which is they really want to save the customer money. And even in the case of a recession period, they don't take advantage of them. Do you think that is because of anti-trust fears, they're worried they're going to get broken up and so they don't want to do you know, they don't do price gouging of anything. No, I genuinely think that's because it's in the best interest of them. They don't, you don't want your best customers dying. Right. Ask tobacco industry right. You want your best customers living and they, I think they would, they should, if any operational entity would choose to do this because it's only in their interest. Oh, one thing that you've mentioned a few times was the potential upstarts. So. I wanted to get your opinion on something like, say Heroku, which just to give context, it's kind of offers some similar things to Amazon, but it's a much lower learning curve, but it's also much, much less powerful. So where do you think things like Heroku fit into this whole ecosystem? Hiroko probably has been an existence as long as it'll be. Correct me if I'm wrong, right? Probably about 10 years now. I think they have chosen their niche and I think they are decided to play that niche. I don't, I don't think they want to play the hyper scaling space. I think they want to stick to these are the know bare metal solutions that we are providing. And we are leader in the space. And if you want to host your Kassandra instance and manage it with your own DevOps team, come and use our solution to host it. You don't have to go build your data centers, but you can have your own DevOps team to maintain your solution. Right. And that's a niche. That's a niche that there are some people who prefer doing that. The communities that have a specific use case to maintenance their own applications. And they are very happy with using private, private clouds or managed. Commodity commodity type public clouds like Heroku. I think everyone is trying to find the niche and be the biggest player there. I don't think if Heroku had to compete, they would have already competed in the space. I don't think they have, they might. Since it's a white space, no one is competing with each other, but once the industry gets a dementia rarity, I think will be a lot interesting to see how each player is deciding to partner with each other. So you mentioned like by 2035, we see these big five players. Do you think it's possible that another thing which could happen is we have the big five and then we have a huge chunk of market share that's taken by just like these small niche islands. Right. I think so. I think private cloud, private cloud is going to have a lot more players just because of the fact that it's a commodity industry, right. Like HPE is going to however, it's share Dallas going to have its share. I'll be embarrassed going to have its share. Toshiba build servers for enterprises with average year. I think there's, there are, there are lot more players at that private cloud niche, and even Amazon has outpost, AWS outpost that it launched a year and a half, couple of years ago basically rolls their silvers in, into your data centers. Then trans erased application on top of it. So I think it's an all quite in that space. It's not in public cloud, in my opinion, I think in one of your threads, I think you put it really nicely, which is Amazon has sort of has this distribution power, that trumps product. And so if somebody is already in the AWS ecosystem, they're more likely to use a Redshift compared to snowflake, even though Redshift isn't really as great of a product as snowflake. And that ends up being like a moat. So can you speak a little bit about that? Sure. Yeah, the one allergy that I keep referring back to is there is a reason Chrome is the most used browser and Android and safari is the most used browser and iOS that does primarily because distribution, but it's not that close. Other than Safaria Safaria is better than Crow. They're good. But most people prefer to use whatever that's coming default them. It's not applicable only to general public, but to software engineer still. I'm a software engineer and I'm building solutions and mobile solutions using tools. Part of AWS and new project comes into maintainable. And let's say that it involves graphical database. I need, you know, a database that provides graphical relationships. The first thing I'm going to be doing, this is literally going to be my workflow. I would go to Google. I would, I would search alias graph database. I'm not going to search best graph database. There is a difference, right? I'm going to search in this graph database and I'm going to go click on the documentation and read it. Probably I'll do a sanity check. Neptune databases, Neptune DB probably I'll do a graph on a checkoff Neptune versus whatever that's out there. And probably read one post that says that Neptune is good enough. And I was like, that's good enough. And there's a trust that's built in these ecosystem and software engineers are like like you said they want to get the job done as fast as possible. But good enough quality. The key is good enough. Good enough. You're right. So, and then people didn't do iterate and improve their product. So the incentive. I wouldn't say incentive, but the human nature is to stick with the dealer that they know. And and because of that, most people are going to choose whatever that's, that's included as part of their toolkit. And this is not to say that snowflakes is a bad business snowflake. He asked any person who use snowflake, they're going to give you glowing reviews for that. They're going to say it achieved a slow. They're going to say it doesn't scale. Well snowflake decouples compute and data storage scales, beautiful pleats, much faster. It provides a lot more integration, much better than any other solutions out there. It's all true. It's probably it's the best thing ever. Slicer. But the native integration and the distribution that the NATO the tools that come directly through AWS are going to always win in my opinion. And it's one of the boon, or I would say pain or software industry. It's so easy to copy features, right? It's there is no Payton pattern that that is protecting snowflakes. Anything else Snowflake's architecture? So I, I, I bet that Redshift team is already working on they already released retrospect from that are decoupled computer. Data storage. And they probably would be logging a year behind snowflake, maybe forever, but they would keep on improving and for the most dollar post it's good enough. Right. And also the integration parts integration is the key to all of it. Imagine you are in WhatsApp in your phone and you want to share a link that you would right. In Chrome to someone through WhatsApp. Imagine not having the share and send button from Chrome that is integration, direct integration, right? That is a pain like a customer pain. And those things happen all the time in AWS. If the third party tool. That is being sold in market marketplace. Most of those, they don't have one-click integration with native AWS tools. Right. Snowflake probably doesn't have one, it probably does, but you know any like a normal, a normal third party solution, wouldn't have one click integration with the kindnesses to put data into it. But Richard does. You don't even like the whole no-code movement. It's, it's only possible because of well defined integrations. If those integrations are not provided for you by default, then there is no no code. You have to code those integrations yourself. So the no code is basically. Strengthening the business model that all these hyperscalers are already having. So distribution trumps quality, in my opinion. Great. Great. You know, this has been amazing. I think I've honestly went a lot about AWS. I it's one of my sort of new favorite things to learn about. So before we wrap up, I want to touch a little bit on your background and how you got into financial investing. I know you come from an engineering background, you know, other engineers that are listening out there who have for their whole life really just coded or stuck to hardware or whatnot. And now they're thinking, well, what's, what's The technology itself. And what's the business. How would you sort of advise them to approach that aspect of technology? I started to learn about finance as a hobby. I started researching into what makes a business. Durable hence more of my hands, my Twitter handle and going through these, going through those research, the one thing again and again, and all this was a good business. Makes all the. All the stakeholders, not the shareholders, all the stakeholders, happy and content. Right. That's one of the key things. And when I learned this, the first thing that popped in my head is wait, the industry that I am working in, it does that, right? Like if you look at the customers are happy because they get through, spend less. Are much more productive. They, shareholders are happy because this is one of those businesses that are actually joining profits left and right. And the employees are happy because these DevOps people the people who work in AWS, they brought they, if not for that, they probably would be ironing. You know, all these repeats. Automations that has to be done again and again in a different company. Now they get to use all that to create solutions that actually empowers the whole world. Right. It, it, it kind of touches on it, makes all the stakeholders happy. And this is the framework that I look any look at any business like For people who offer them technological background, they see a lot of new things that are exciting, right? Like electric cars, like you see Tesla is doing phenomenal phenomenally with their car manufacturing, with self-driving and people are in love with the car, but you have to ask yourself all these questions too. How durable the company is, how profitable the company is. And you have to build these mental frameworks by basically, you don't have to do anything new. Just listen to you know, Warren buffet, Peter Lynch Charlie monger Darcy and all these people, and basically how these mental frameworks in your head to judge companies based on their qualities. And once he judge companies based on their qualities, you can pretty much come to an understanding of, okay, would this company, it boils down to a couple of questions. Would this company last 30 years, what would it take this company to last 30 years? If this company, if you say that this company will last 30 years would there be other companies coming in to take the profit share? If that's the case, then why would customers choose this company or the other? Right. So it's a, once you start asking the core question, you can dig in again and again, and again, to find why there's the durability of this company, right. I think building all these mental models in your head is probably the number one starting place. And then you can start looking into the financial statements, just like and look at their numbers and see how much is their growth trajectory. How much are they growing revenues, their profits, and what market share they're having? What are the economics. You can look at all those things at the secondary level, but at departmental level you should have a good understanding of what. A business, good business. Sure. And I, you know, I I'll just add to that. I think beyond, even beyond investing, it's good to study these things as a person in tech, just because you're probably leaving jobs every few years. And as you determined. Sort of what company you're heading into. It's probably good to know, like the financial health of this company and sort of the market they're in and the sort of the bigger point of view, the bigger picture of the, of the business and the industry. So on that note dribble investments. Great. Thank you so much for joining us. I will, we will include sort of your Twitter handle and other places that people can find your content in, in the show notes. Otherwise, yeah. Thank you so much. This has been really informational and education. Thanks guys. I really appreciate you guys having me. That's our episode for this week. Thank you so much for listening. Make sure to subscribe to us and rate us on Apple podcasts. We would really appreciate the support. You can also follow me on Twitter at F Z from Cupertino and Busan. The ad next facade. See you guys next week.