Amazon Profits From Early Cloud Start

Yet, a knock against Amazon has been, despite any head start, whether the company has the capacity to scale not only to support the growing needs of large enterprise customers, but also to sustain the onslaught of deep-pocketed, indefatigable competitors such as Microsoft.

In another eWEEK story from last fall, John Shewchuk, a Microsoft distinguished engineer, appeared to look beyond Amazon when discussing Microsoft’s plans to deliver cloud services.

Said Shewchuk: “We’re probably one of the biggest acquirers of data centre space around the world. I think you’ve probably seen these statistics. There’s Google, there’s Microsoft, Amazon to a degree, but really we’re making a massive, massive, massive investment in having the computational capabilities, the Internet connectivity capabilities and the geo-presence to be a leader in that business. Now, it’s a little bit hard to see what we’re doing until we bring more of those pieces together, but I think you’ll be excited about the work that we’re doing in that space.”

It’s not just for small businesses

At the same time, Selipsky seems bemused at the notion of Amazon being viewed as a solution for SMBs or mom and pop operations. “Our services have been tested and used for mission-critical applications by thousands of customers, and I’m slightly surprised there haven’t been more competitive offerings,” he said. “We’ve had large enterprises — Fortune 50 companies — using us from Day 1. Microsoft was even a launch customer of S3. It’s true we’ve created a lot of excitement and usage among startups and VCs, but at the same time we’ve seen significant interest, testing, integration and adoption by enterprises of all sizes.”

Selipsky then listed a number of AWS’ large enterprise customers, including Eli Lilly, ESPN, eHarmony, Netflix, the Indianapolis Speedway, Pfizer, Harvard Medical School and Playfish, a gaming company that is the maker of five of the top 10 games on Facebook and has more than 25 million users. He also pointed out Amazon’s ongoing partnerships with enterprise players such as IBM, Oracle, Red Hat, CA, Cap Gemini and others to enable their solutions to run in the cloud. “I’d hold up our solution to anyone else’s enterprise solutions,” he said.

Why? Because of the company’s invaluable experience in delivering cloud computing, as well as lessons learned supporting the Amazon.com retail operation.

“We’ve iterated many times on each of the services that we’ve released, and each has had significant new features added over time,” Selipsky said. “These are battle-tested services that are in use all over, and I don’t think there’s a good substitute for that learning. We’ve earned a reputation for being innovative in this space.”

However, Selipsky said he believes AWS’ greatest competition “is likely to be the disk drive on the server. Companies are used to doing IT a certain way. And AWS is one way, but any change of that magnitude will have to be over time, with decision makers getting comfortable with new ways of doing things.”
Thus, the way Amazon intends to differentiate itself is with rock-solid performance, security and reliability, he said.