AWS gears cloud for SA ecommerce launch

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 EC$2,$ 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

AWS is the backbone of

Amazon.com's ecommerce service, says Jan Hofmeyr, AWS vice

president of EC$2.$ 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'$\text{'}$

QUESTIONS $2$: $30$ MARKS

As technology continuously improves, it becomes imperative for companies to be flexible and adapt

to chanages in the business environment. Provide evidence from the case study as to how Amazon

can use E$-$commerce in changing business trends, and provide further input on why adapating to

changes is important for E$-$commerce companies.