Amazon: We’re the secret sauce behind Israeli start-ups

Saving shoestring-funded start-ups money on IT infrastructure is a factor in helping them succeed, says a top Amazon executive

Dr. Werner Vogels talks cloud tech at the AWS event (Photo credit: DLD)
Dr. Werner Vogels talks cloud tech at the AWS event (Photo credit: DLD)

Amazon, the American web retailer, is a favorite of Israeli on-line shoppers — but’s it’s an even bigger favorite of Israeli start-ups. That fact was much in evidence Wednesday, when over 1,500 entrepreneurs and start-up developers attended a series of events sponsored by Amazon, promoting its cloud platform, Amazon Web Services (AWS).

“It’s a perfect system for start-ups, which are working on shoestring budgets,” said Dr. Werner Vogels, vice president and chief technology officer at “Instead of spending money on servers and information technology infrastructure, they can use those funds for development and improving their product.”

To help those start-ups, Amazon opened an office in Israel last January. The AWS conference in Tel Aviv was the culmination of nearly a year’s hard work spreading Amazon’s cloud gospel. Thanks to the cloud in general — and AWS in particular, said Vogels — Israeli start-ups were more agile and flexible than ever, and more successful as well, because they could dedicate more resources to improving their products. That may not have been Amazon’s specific intent when it started marketing AWS services to Israeli start-ups three years ago — but the happy results of that deployment cannot be denied, said Vogels.

AWS allows companies to use servers and computing services in the cloud, avoiding the need to buy and care for expensive servers. During a presentation to journalists, Vogels discussed the advantages of AWS for companies, citing numerous case studies — presented by the companies themselves. The live testimonials sounded like an advertisement for AWS, but Vogels reassured a group of journalists that the presentations were completely voluntary — and unsolicited.

Among those talking cloud tech at the event was Magisto, an Israeli start-up that lets users make something of the orphan video and photos sitting on their computer. Using artificial intelligence algorithms developed by the company, the app analyzes the clips, looking for similarities in faces, scenarios, emotions, topics, locations, continuity, and other factors, and assembles them into a single “story,” correcting for color, focus, and other video basics. The app will even suggest music appropriate to the video, and synchronize it to the audio in the clips (lowering the music volume when people are talking, increasing it at a particularly emotional moment, for example.).

Speaking at the event, Ori Hasse, VP R&D at Magisto, credited AWS with an important role in the company’s recent growth. Started in 2011, Magisto currently processes 100 million videos each month. “We basically have one person doing our IT management, because everything is done on the Amazon cloud,” he said. “Because we don’t have to worry about IT, we can focus almost all our efforts on development. We are coming out with new versions every few weeks.”

Video editing is one thing, but what about what really makes the world go round — money? “We work with several top banks in Europe and Australia, and they trust our security, which is as strict as possible,” he said. AWS is a public cloud, and companies of all types do business using virtual servers on the same physical server and network. That sounds like a recipe for mass hack attacks. In fact, an AWS-hosted company called Code Spaces was hacked last June, but according to Amazon officials, the problem was with the client’s security system, not Amazon’s.

Potential security problems didn’t scare off Israel’s Bank Hapoalim, Israel’s largest lender, which is making extensive use of AWS. “In a competitive atmosphere where things are changing from day to day, we have to be agile and quick in order to ensure customer satisfaction, providing them with the services they want,” said Gigi Ashkenazy, Bank Hapoalim’s chief technology officer. “We thought for a long time about deploying services on the cloud and how best to do it. The advantages — being able to dispense with hundreds of servers and redeploying staff to produce better technology instead of maintaining what we have — is a great development, allowing us to better serve our customers. To build a new server in a banking environment takes months — never mind building the IT infrastructure for a whole department. With AWS, building the virtual servers takes minutes.” Also crucial to the Bank’s decision, she said, was its previous positive experience with Matrix’s CloudZone, also built on AWS infrastructure.

Neither Magisto nor Hapoalim own any stock in Amazon — in fact, they pay the company, said Vogels. “Start-ups in Israel that have gone public or acquired, including companies like Waze, have told me that we were an important reason they were able to deploy the products and services that got them where they are. We’re very proud to be playing such an important role in Israel’s tech start-up ecosystem.”

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