Why, right now, Amazon is the only game in town ?

Amazon is currently the big bear of Cloud Computing Platforms. It’s web services division has proved disruptive and consistently shown innovation and breadth of services within its platform. It is growing at a rapid rate. Forty per cent of Amazon’s cross revenues are from its 3rd party merchants. Amazon Web Services is an extension of this. The core Amazon site uses its own web services to build the Amazon pages on the fly, dynamically. This results in approximately 2-300 Amazon Web Service calls. In short, it eats its own dog food.

Why are Amazon good at this ?

1. They have a deep level of technical expertise that has come from running one of the largest global online consumer marketplaces.

2. This has lead to a culture of Scale and Operational excellence.

3. They have an appetite for low margin, high volume business, and more importantly the understand it fully.

Lets look at the competition. Microsoft certainly can satisfy  the first point from the list above, but will probably have to buy the second, and certainly have not in their history demonstrated that they have the third.  For this reason we cannot expect Azure to be an instant Amazon competitor. What about RackSpace ? Well they can satisfy 1,and to a lesser extent 2, but again it is not clear that they have currently fully assimilated point 3. IBM have both 1 and 2 but again fall down point 3.  Currently Amazon are unique in the combination of what they provide, how they provide it, and how they price and make money for it.

The core ethos of the Amazon CTO, Werner Vogels, is that “everything breaks all the time“, and it is with this approach that they build their infrastructure. Amazon currently have 3 worldwide data centers. One on the east coast, one on the west coast, and one in Ireland. The intent is to have at least another in AsiaPac.  Each data centre is on a different flood plain, different power grid, and has different bandwidth provider to ensure redundancy. If S3 is used to store data then 6 copies of the data are stored. In short, the infrastructure is built to be resilient.

This does not mean there will not be outages. We know that this has occurred not just for Amazon but for other prominent online companies as well. Amazon’s SLA guarantees 99.95%  uptime for EC2 and 99.9% for S3. What does this mean in terms of downtime ? Well this is approximately 4 hours and 23 minutes per year. Not good enough ? Well reduced downtime costs and I know many, many enterprise organisations who could only dream of having downtime as low as this. Chasing 5 9’s availability is in many ways chasing the dream.  Achieving it is often more costly than the cost of outages it is meant to protect. Amazon already provides a services health dashboard for all it’s services, something Google also seems set to do. It is set to provide additional monitoring services later in the year (along with auto-scaling and load balancing services) that make the core services even better.

Amazon has proved that as soon as you take away the friction of hardware you breed innovation.The Animoto use case is a good example of this, as is their case study on the Washington Post.  There are more Amazon case studies here.

Right now, for my money, Amazon is on its own for what it is providing. Sure other companies provide hosting, and storage, and for many users they will be good enough, but for the sheer innovation and breadth of integrated services coupled with the low cost utility compute model, Amazon stands alone.