Amazon’s Public Cloud Battles IT Providers for Workloads from Big Companies
Enterprises may or may not be suspicious of Amazon Web Services (AWS), the giant online retailer’s public cloud infrastructure, but many of them are already using it. In fact, the biggest companies have already deployed workloads beyond the test-and-dev on Amazon Web Services. That has happened despite the noise about how Amazon’s public cloud is not reliable or safe enough for handling important workloads. So, all the talk about how big companies are reluctant to place workloads on AWS may be just that—talk.
Over at Gigaom, Barb Darrow deduced that every Fortune 1000 company is already running workloads beyond the test and dev stage in Amazon’s public cloud, which does not bode well for Dell, HP, IBM, and other IT providers—all scrambling to keep up with AWS’ dominance. Darrow, who described AWS as “wildly successful,” also posed a question: “Can AWS sustain that momentum as new options come online?”
Darrow cited cases exemplifying how AWS are taking on workloads from enterprises.
Sharon Wagner, CEO of Cloudyn, a company that helps businesses make best use of Amazon Web Services, said that 30 percent of Cloudyn’s AWS customers are large enterprises that include not just development and testing on AWS but also their business-sensitive workloads.
Ken Ziegler, CEO of Logicworks, a cloud computing and managed hosting provider in NYC, confirmed that big accounts do work with AWS. Logicworks even capitalized on it and launched its new managed service arm to handle the AWS deployments of Logicworks’ business customers.
“Many of the most cited barriers to cloud adoption have been addressed at this point and it’s getting more difficult for territorial IT decision-makers to defend managing infrastructure in-house,” Ziegler said. “You’d be surprised just how many companies have already made the move. It’s not just Netflix.”
Amazon Web Services has expanded its enterprise-like service and support options. In addition, Amazon proactively rolls out its services before making formal announcements and is said to be gearing up for more rigorous competition to get enterprise workloads.
Sources say that Amazon offers special promotional deals like discounts to business customers that spend at least $250,000 per year in AWS business. Back around June 2012, Amazon only offered discounts to business customers spending at least $1 million a year. Why the change in discounting strategy now? Amazon did not reply to requests for comment regarding the company’s discounting practices.
HP and IBM have something that Amazon does not have: long-term ties to big business customers.
“AWS feels that IBM entering with SmartCloud and HP with its public cloud may take away enterprise customers because [those older vendors] have much better relationships with them,” said one AWS partner. Telefonica and Joyent’s joint public cloud offering is also a problem for Amazon because telcos not only own the network, they are also known to have tight relationships with enterprises.
AWS rivals claim they are better options for enterprises than Amazon’s cloud infrastructure. Rackspace shows off its customer support. HP, on the other hand, says its enterprise service level agreements (SLAs) are set to court business customers over.
Amazon battles stealthily for enterprise IT. According to some AWS partners, Amazon is said to have been intensifying its enterprise sales drive under the radar. AWS has hired sales engineers and other people from enterprise-driven companies like EMC, HP, and SunGard.
Amazon had a big head start with Amazon Web Services. The total net sales alone for Amazon’s “other” category – which is mostly AWS revenue – amounted to $608 million in the company’s third quarter ending on September 30, 2012. Nine months after that, the net sales surged to $1.582 billion.
Barb Darrow summed up Amazon’s grappling for its share of the enterprise IT market: “Amazon’s problem is that it’s had that field much to itself so far. That won’t be true going forward.” (KOM) Link.