AWS Customers Leverage Hybrid Cloud — And Some Are “All In”

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Ten years after Amazon Web Services (AWS) launched its first Elastic Compute Cloud (EC2) service, AWS is providing a world-wide “snapshot” of the state of customer adoption. AWS executives are traveling around the globe, hosting 30+ free Summits to attract prospective and current customers, in a year-long effort.

This format is revealing more detail about the full portfolio of 70+ services AWS now offers to customers – such as database services, advanced analytics, and management services. That adds more context to the initial offer of less expensive compute and storage, first heard 10 years ago.

At the Summit, Dr. Matt Wood, General Manager of Product Strategy for AWS, said AWS has a $10+ Billion billion run-rate, with more than 1 million active customers paying for AWS services on a monthly basis. In its June 28, 2016, earnings call, AWS updated that data, saying it has a $11 Billion run-rate and that it is seeing nearly 60% year over year growth, comparing 2Q16 with 2Q15. It announced that AWS net income had more than doubled, year over year, to $718 million on $2.88 Billion in AWS revenue in 2Q16.

The AWS Summit was a one-day event, to be repeated in many U.S. cities, including Boston, Atlanta and Dallas – and many global cities, including Rio de Janeiro, Beijing, and Hong Kong, by fall. In all, 30+ Summit events were planned – and many have already taken place in the Americas, Europe/Middle East, and Asia/Pacific.

Why take this approach? It’s a way to present a consistent picture worldwide, and to evangelize the adoption of services that will, in many ways, replace traditional data center and IT activities within enterprises, governmental and non-governmental (NGO) organizations. Usually, customers start with selected workloads – rather than migrating all workloads. But, over time, more workloads can migrate – provided that high availability, reliability and security operate at acceptable levels, over time.

 

Going  “All In” With Cloud

A small but rapidly growing group of AWS customers goes “all in” – moving all apps to AWS for deployment in production. So far, many of these companies are in the “born on the web” or SMB category. Others are well-known, including Netflix, which live-streams digital content via AWS servers; and Reddit, a Web content company.

To win this “all in” business, AWS and its competitors must agree to take on these responsibilities, which formerly were the sole concern of IT managers and CIOs. AWS must show customers it is providing services that would otherwise require time-consuming systems procurement, provisioning, and ongoing maintenance. This is how AWS plans to expand, replacing current and aging IT systems.

 

Emphasizing Analytics

AWS highlighted its ability to apply analytics to the data it can store in Amazon Simple Storage Service (S3) . Wood said that AWS provides support for building data warehouses on “retrospective” data stored in the Amazon Redshift service; real-time analytics via Amazon Elastic MapReduce (EMR); and analytics tools for business-unit end-users, to expand analytics use beyond data scientists.

As to process, AWS described these stages of data collection and analytics:

  • Collect storage and analyze data. This builds a data repository, using the Amazon Redshift service, with a “retrospective view” of customer data.
  • Build an end-to-end view of the customer’s business, with real-time inputs and click-stream inputs to the data, using Amazon Kinesis.
  • Use analytics tools provided by AWS, extending those tools to business unit managers, in addition to data scientists who are more technically oriented. These support dynamic queries via Amazon QuickSight to view the end-to-end business data.

Going Forward

IT’s move to the cloud – now a decade into that adoption – is progressive; increasingly important workloads are moving into the cloud, over time. AWS disclosed the names of many high-profile customers that are leveraging AWS, including Adobe, Accenture, Autodesk, BP, Dow Jones, Finra, Financial Times, Royal Dutch Shell, Infosys, Johnson & Johnson, Merck, Philips, and Pfizer. Governmental agencies and non-governmental organizations (NGOs) are also using AWS cloud services – with 2,300 government agencies, 22,000 NGOs and non-profits and 7,000 educational institutions cited as proof-points by AWS executives.

 

Taking More Responsibility as Migrations Grow

Amazon has an early-mover advantage in the cloud service provider (CSP) market, but the marketplace has expanded, with the entry of other large cloud service providers: Microsoft Azure, Google Cloud Platform and IBM SoftLayer, among others. Awareness of AWS’ earliest services – the Amazon Elastic Compute Cloud (EC2) service and the Amazon S3 storage service – is very high.

The earliest draw to AWS was avoidance of capex for on-prem data centers. However, AWS knows that customers know much less about its portfolio of 70+ services, many of them focused on management and operations within the data center. Having detailed knowledge about that portfolio is critical to future migration of business-critical and mission-critical workloads that would otherwise remain in “silos” within on-prem IT infrastructure.

The decision to move more workloads off-prem surfaces a series of IT concerns about cloud computing – all of which much be addressed by CSPs. Concerns over security, high availability and hands-on control for IT systems with business value have caused some customers to hold off on moving more workloads to the public cloud. Long-installed, mission-critical systems are in-house, privately controlled systems that sit within the corporate firewall for security purposes.

The key to gaining new customers – and broader adoption of cloud services – is making it clear that the cloud provider will take full responsibility for IT service-level agreements (SLAs), workload availability and data security.

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