Can Amazon Web Services serve enterprises effectively?
By Edwin Yapp November 25, 2014
- Makes serious enterprise play, challenging old foes along the way
- Embracing hybrid model and security concerns, but faces stiff competition
ANALYSIS A WEEK after the conclusion of Amazon Web Services’ (AWS) re:Invent annual conference at the Sands Expo, Las Vegas, one common theme emerging from the headlines of a host of major tech press was this: AWS is throwing down the gauntlet and taking the fight to the doorstep of traditional IT shops.
At this year’s re:Invent, its annual event for partners, customers, analysts and the media, AWS executives were all in sync, declaring that the cloud computing arm of Amazon.com Inc now has the chops to be a serious, enterprise-grade IT vendor.
See previous re:Invent story: Amazon Web Services aims to keep ‘king of cloud’ crown
First to make this clarion call at the two-day convention was senior vice president Andy Jassy, who said that no-one in today’s business environment argues anymore about whether the cloud is relevant or not, but the question is when to employ the technology.
See previous re:Invent story: Amazon Web Services trains its spotlight on enterprises
Speaking to a crowd of about 13,500, the head of Amazon.com’s cloud business said every company in the world has to keep transforming its business to remain competitive, and that while having a lower cost structure is an enabler for transformation, it’s typically not the main driver.
“The main drivers are agility and innovation, and the cloud can enable that in a significant way,” he said.
“It’s not just that you have access to a fully-structured, technology platform at your fingertips, but it’s also how fast you can deploy servers if you want to try an experiment and do something new.”
Jassy argued that in the ‘old world,’ it would take between 10 and 18 weeks to deploy servers, and this exercise demoralises people and stifles innovation as most won’t bother to experiment even if they had ideas.
However, with the cloud, thousands of servers can go live in minutes and people can go from idea to launch in record time, he claimed.
“This totally challenges the innovation cycle because people know that if they have [innovative] ideas, it’s worthwhile trying to see if they work [by using the cloud],” he declared.
This is also why Jassy told the media he's prepared to bank all of Amazon's resources onto the cloud, believing that its cloud business could one day be bigger than its e-commerce arm.
See previous re:Invent story: Amazon banking its future on the cloud
How we got here
AWS’ enterprise ambitions are rooted in its belief that its cloud infrastructure was born out a fairly unique situation.
Instead of starting out as a hardware or software player using conventional scale-up systems, AWS’ value proposition stems from its massive scale-out infrastructure, designed and built through its experience running Amazon.com, the world’s largest e-commerce site.
In fact, its rise to challenge traditional enterprise vendors was quite stealthy, as these traditional players did not recognise the company as a true potential threat to their organisations, which have for decades dominated the market.
The granddaddy of them all, IBM Corp, has since the 1970s led the field with its mainframe offerings. Then came Microsoft Corp, which in the 1980s and 1990s disrupted IBM’s business, reimagining IT via its PC-fuelled client-server proposition.
Alongside these players was Oracle Corp, which has over the last three decades become a behemoth, buying up dozens of companies, culminating in a move to become a hardware player when it bought Sun Microsystems Inc in 2009.
Also in the mix is Germany’s SAP SE, which in recent years has been diversifying from being the premier enterprise resource planning (ERP) software player to becoming a powerhouse in big data analytics via its HANA in-memory technology.
These traditional IT vendors produced proprietary software that sits on top of very expensive specialised hardware – add to this the issue of very expensive and complicated licensing schemes, and the need to have specialised teams managing IT.
The old guard made billions from customers spanning the world of financial services, retail, manufacturing, telecommunications, healthcare, the automotive and government sectors, to name a few.
However in recent years, this conventional business model has been challenged because customers today are increasingly eschewing highly specialised hardware, inflexible licensing schemes that lead to vendor lock-in, and shunning the proprietary approach.
In the middle of all this sits the data centre, which today is the heart and soul of any modern organisation. With data centre management becoming increasingly complex due to a variety of factors, enterprises are turning away from running data centres within their own premises.
The factors above include the need for more computing power and storage for vast amounts of data, the need to support multiple applications and new trends such as mobility and social media, and the dearth of skills to manage the data centre.
Next Page: Legacy IT defends itself
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