Amazon Web Services chief explains why Amazon competitors shouldn't be afraid to use its cloud

Amazon may be entering new businesses left and right, but that shouldn't frighten companies using its cloud services, its top cloud exec said.

Even some of Amazon's most direct competitors — like Netflix, which competes with Amazon on video streaming — use Amazon's cloud, Andrew Jassy, the CEO of Amazon Web Services (AWS), told CNBC's Jon Fortt on "Squawk Alley" on Wednesday.

"The vast majority of media companies are using AWS," Jassy said.

"Netflix, despite the fact that they compete very aggressively with Prime Video on the Amazon side, they run everything on top of AWS and have for several years — same with Disney, Warner, Fox, HBO and Turner, they all run on AWS. So what they care about is they want the broadest selection of services so they can continue to innovate for their customers."

As the head of Amazon's cloud division— the dominant cloud services provider in the industry — Jassy has managed to keep ahead of competition from Microsoft, Google and others through competitive prices and tons of services. Jassy said the cost structure, as well as the 2015 purchase of Elemental Technologies, has helped it win the media business, for instance.

But Amazon is in so many other businesses — retail sales, movies, grocery stores, smart home devices and so on — that competitors in those areas may be wary of paying a big tech bill to Amazon.

Microsoft CEO Satya Nadella pointed out as much to CNBC earlier this week.

"Amazon and Google both are fantastic at being able to rig transactions," Nadella said. "They have a nice two-sided market that they can subsidize one to advantage [the other]."

Jassy fired back on Wednesday, saying Amazon's approach is focused on what customers want, not competition.

"The way that Amazon partners with customers is very unique," Jassy said. "Technology companies today are mostly competitor-focused, or they're product -focused. They say, 'Look, we know what the product should do. It's great that you have input, Mr. and Mrs. Customer, but leave it to the experts.' Those strategies can work, but they're just not ours. We are customer-focused — and the vast majority of what we build is driven by what our customers tell us matters to them."

Like Google AI chief Jeff Dean, Jassy said his customers have choices around how their data is used.

"Our customers' data is our customers' data. Full stop. So they get to choose where it lives in AWS. It doesn't move unless they choose to move it. To us, it just looks like a blob, so they have the responsibility for their own applications to make sure that it's safe," Jassy said.
"We have the responsibility, as it runs in our infrastructure, to make sure that no one has access to that data. And our customers have lots of ways to protect themselves, including being able to encrypt that data."