Practically Speaking about Amazon Web Services – Part 2: A Cloud Giant

Practically Speaking about Amazon Web Services – Part 2: A Cloud Giant

Part 1 can be visited here.

We saw the various innovative cloud products and services offered by Amazon Web Services in Part 1. At this stage, it is quite natural that we have the business economics going on in our mind as how big is the cloud business industry and what part is being played by Amazon. Let us have a look at how Amazon Web Services has fared in analysts views. After all, before Amazon Web Services came along, Amazon was the least known for putting up a fight with IT Giants: such as: Microsoft, IBM, Google etc., where they not?

IDC, in a press release dated June 23rd,2010, says that global revenue of public cloud services which was around $ 16 Billion in 2009 will grow to $ 55.5 Billion in 2014. The research report further states that IT cloud services are crossing the chasm with modest revenue; fastest growth of about CAGR 27.4%.

-Reference: Worldwide and Regional Public IT Cloud Services 2010–2014 Forecast by IDC – (IDC #223549)

Another report released by UBS Investment Research analysts Brian Pitz and Brian Fitzgerald says that, for the type of cloud services offered by Amazon Web Services the market size can be pegged at around $ 15 to 20 Billion in the year 2014.

As per analysts, Amazon Web Services clocked revenue of about $ 0.5 Billion in 2010; could go up to $ 2.54 Billion in 2014. And this is about a 5% of total market share! And a market share of about 15% in similar services!  Analysts predict that from the last quarter of 2010, Amazon Web Services revenue will have an impact on Amazon Inc., as a company. Well, not minding accuracy of these market share figures, one can clearly say that Amazon is an early pioneer player poised to grow big.

From the enterprise perspective, if we want to avail public cloud facility of Amazon Web Services, there are three distinctive areas of services. One is Amazon Elastic Computing Cloud EC2, Second is Cloud Storage – Amazon Simple Storage Service – S3, and third Database – Amazon SimpleDB and now, Amazon RDS.

The questions for the enterprises adaption are:

Will these cloud services work for us? Are they dependable? Are they secure? Will we have the IT expertise to manage the cloud? Will it deliver for our users worldwide?

The availability of Amazon Web Services:

As we saw earlier, Amazon Web Services AWS is available from four different regions. In the US itself it is available from two regions, US East (N.Virginia) and US West ( N.California). While the response time from Washington is less than a second, the response time from Los Angeles is as high as 11 seconds. In terms of its response time, AWS is second best in USA; only next to OpSource. The major advantage of AWS is its 100% availability, throughout. Source: CloudSleuth.

While spreading global availability speaks well for AWS adaption, there are practical difficulties when enterprises start using it. US East is by far the biggest region of usage having most number of Amazon Machine Images (AMI). Unfortunately accessing this region from the other part of the world comes with higher latency. One may argue that we can access other regions like Europe (Ireland) or Asia-Pacific (Singapore). Practically all the AMIs those are available in US East are not available in all regions. Also, if a company has already started a cloud facility out of US East region, changing the same to other region goes with its own challenges.

Story by Cloudtweaks

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