Last week we posted Part I of our interview with Jason Williamson, Global Leader, Management Consulting for Amazon Web Services (AWS). Jason shared with us AWS’s traction in the enterprise, as well as how AWS fits into the sourcing and partner ecosystem.
Here is Part II of our discussion:
Talk to us about AWS’ view on price and margins. You all continue to put pressure on the market with price decreases – are your primarily concerned about growth or profit?
High volume/low margin businesses are in our DNA. As we’ve grown and become more efficient, we’ve reduced prices 42 times since AWS launched in 2006 with no competitive pressure to do so. This is because we have a culture of passing costs savings down to the customer based on our own internal efficiencies, high rates of utilization and innovation in hardware, networking and software. Driving cost efficiencies is an area we’re going to continue to focus as we believe that is one of the ways to maintain customer loyalty and drive growth.
Let me illustrate this with a customer story. Samsung uses the AWS platform of technology infrastructure services to build its Smart Hub application which allows users of Smart TV and Blu-ray players to access content of 3rd party providers. With every user’s request, Smart Hub application authenticates devices, delivers apps and content, and pushes notifications across multiple devices. Samsung’s cloud deployment strategy has saved CAPEX by $34 million and reduced OPEX by 85%. If Samsung were to use the traditional on-premises datacenter, it would have spent $34 million dollars in hardware and maintenance expenses during the first two years. With AWS, they met reliability and performance objectives at a fraction of the cost.
How about security? How is AWS addressing concerns about the shared nature of the AWS platform?
Security is the number one priority at AWS. Examining the AWS cloud, you’ll see that the same security isolations are employed as would be found in a traditional datacenter. These include physical datacenter security, separation of the network, isolation of the server hardware, and isolation of storage. There is nothing inherently at odds about providing on-demand infrastructure while also providing the security isolation companies have become accustomed to in their existing, privately-owned environments. We have also completed certifications such as ISO 27001, FISMA, PCI, FedRAMP, SOC 1, 2 and 3 that gives customers and their auditor’s confidence in our high level of security.
We often find that we can improve companies’ security posture when they use AWS. Our scale allows us to invest significantly more in security policing and countermeasures than almost any large company could afford themselves. In addition, we have a world-class team of security experts monitoring our systems 24/7 to protect customer content.
For example, customers who want to run highly secure environments running sensitive workloads leverage our Virtual Private Cloud (VPC). VPC lets you provision a logically isolated section AWS where you can launch AWS resources in a virtual network that you define. You have complete control over your virtual networking environment, including selection of your own IP address range, creation of subnets, and configuration of route tables and network gateways. Further, you can create a dedicated Hardware Security Module (HSM) appliances within your AWS Cloud. An example of this is with Haven Power in the UK. As part of the disaster recovery plan Haven Power and Smart421 set about building a replica copy of the majority of their technology infrastructure sitting in the AWS cloud. For this Haven Power has Oracle and SQL Server databases, Active Directory, Microsoft Exchange, Windows file shares and other Amazon Machine Images hosted in an Amazon Virtual Private Cloud (Amazon VPC) in the EU (Ireland) Region in Dublin, ready to go at a moment’s notice should something happen.
What do you say to buyers who are concerned about lock-in and AWS-specific APIs?
One of the great things about AWS is the flexibility. The flexibility to scale up and scale down computing demands as you need to, the flexibility to choose the operating environment you are most comfortable with (we have 10 different operating systems to choose from on EC2), the flexibility to use one or all of our services, the flexibility to work 100% in the cloud or just have part of your infrastructure in the cloud to take the heavy lifting compute tasks off your in house resources and the flexibility to pay on demand and not be locked into rigid licensing terms and conditions. AWS supports Windows and a variety of Linux operating systems including Red Hat, Oracle Linux, Suse, Ubuntu, etc, meaning that any application that runs on Windows or Linux will run on AWS and we have invested heavily in working with the top ISVs including SAP, Infor, Informatica, Oracle, etc, to make sure their products are portable onto AWS and run really well and cost effectively. Our model makes it easy for customers to spin up new resources when they need it and shed it when they don’t. I don’t know about you, but that doesn’t sound like lock in to me.
What’s the single most important piece of advice you can give to new AWS users?
The faster you adopt an all-in strategy to the cloud, the faster you will realize the full benefits of savings. I appreciate that for now, many folks won’t be able to fully get there for a variety of reasons, but with the fullness of time, we’ll see more and more firms fully embrace the public cloud. AWS provides the tools and solutions to let you integrate your existing on-premises resources with AWS. These services range from integrated and secure networking with VPC and Amazon Direct Connect to integrated cloud backups to Amazon Storage services that are designed to provide 99.999999999% durability.
Make sure you have a road map so you can have a smooth journey and fully realize the value that comes with the next generation of computing. AWS can help guide you down that path, through our customer support, solutions architects, architecture best practices, professional services and our partner ecosystem. A great place to start would be to visit aws.amazon.com/enterprise.
Jason Williamson is Global Leader, Management Consulting for Amazon Web Services. You can connect with Jason on LinkedIn and follow him on Twitter.
About the author
Stanton helps enterprise IT and sourcing leaders rationalize and capitalize on emerging technology opportunities in the context of the global sourcing industry. He brings extensive knowledge of today’s cloud and automation ecosystems, as well as other disruptive trends that are helping to shape and disrupt the business computing landscape. Stanton has been with ISG for more over a decade. During his tenure he has helped clients develop, negotiate and implement cloud infrastructure sourcing strategies, evaluate and select software-as-a-service platforms, identify and implement best-in-class service brokerage models, and assess how the emerging cloud master architecture can be leveraged for competitive advantage. Stanton has also guided a number of leading service providers in the development of next-generation cloud strategies. Stanton is a recognized industry expert, and has been quoted in CIO, Forbes and The Times of London. You can follow Stanton on Twitter: @stantonmjones.
About the author
Stanton Jones
Stanton helps clients maximize value and reduce risk in their third party relationships. In his role as lead analyst for the ISG Index™ Insider, Stanton helps ISG clients, service providers and equity analysts understand how disruptive technologies are transforming IT and business services markets. Stanton also regularly guides enterprise technology executives through the global digital ecosystem via the ISG Digital Innovation Tour™. An ISG Digital Fellow, Stanton has been quoted in CIO, Forbes and The Times of London and has appeared on Fox Business News.
