Amazon: Debunking The Cloud Computing Myths

Myth 3: I Can Get All the Benefits of the Cloud by Creating My Own In-house Cloud or Private Cloud

“There’s a lot of marketing going on about the concept of the ‘private cloud,'” Selipsky said. “We think there’s a bit of a misnomer here.”

In general, “we often see companies struggling to accurately measure the cost of infrastructure,” he said. “Scale and utilisation are big advantages for AWS. In our opinion, a cloud has five key characteristics: It eliminates capex; allows you to pay for what you use; provides true elastic capacity to scale up and down; allows you to move very quickly and provision servers in minutes; and allows you to offload the undifferentiated heavy lifting of infrastructure so your engineers work on differentiating problems.”

Moreover, Selipsky said what people are calling private clouds come with the following drawbacks, where the customer will:

• Still own the capex … and they’re very expensive (big fixed investments)
• Not pay for what you use
• Not have true elasticity … when groups relinquish their servers, the company still owns the data centre space and servers … and will also find that managing this supply chain will present a dilemma … will either have to significantly overprovision which is wasteful or become really expert at managing just-in-time supply-chain so there are no long waits for servers … managing a supply chain like this is really hard and takes a lot of effort and refining and keeping the status quo of long time to market is not so appealing either
• Still own the headache of managing the undifferentiated heavy lifting

Getting a little deeper, Selipsky added, “With a private cloud you have to manage capacity very carefully … or you or your private cloud vendor will end up over-provisioning. So you’re going to have to either get very good at capacity management or you’re going to wind up overpaying.” And challenging the elasticity of private clouds, Selipsky said, “The cloud is shapeless. But if it has a tight box around it, it no longer feels very cloud-like.”

However, a key driver for AWS’ offerings is the company’s ability to save customers money and drive efficiency.

“In virtually every case we’ve seen, we’ve been able to save people a significant amount of money,” Selipsky said.

Some of the reasons for this are that as AWS’ business has grown dramatically over the past four years, the company has achieved enough scale to secure very low costs. Additionally, AWS has been able to aggregate hundreds of thousands of customers across every imaginable use case and various geographies to have very high utilisation of its infrastructure – how well you utilise the infrastructure is a key economic driver because if you have high utilisation, you can buy less servers to serve the same load somebody with low utilisation has to serve with many more servers.

“In our conversations with customers we see that really good enterprises are in the 20-30 percent range on utilisation – and that’s when they’re good … many are not that strong,” Selipsky said. “The cloud allows us to have several times that utilisation. Finally, it’s worth looking at Amazon’s heritage and AWS’ history. We’re a company that works hard to lower its costs so that we can pass savings back to our customers. If you look at the history of AWS, that’s exactly what we’ve done (lowering price on EC2, S3, CloudFront, and AWS bandwidth multiple times already without any competitive pressure to do so).”

Myth 4: If I Can’t Move Everything at Once, the Cloud Isn’t for Me

“We believe this is nearly impossible and ill-advised,” Selipsky said. “We recommend picking a few apps to gain experience and comfort then build a migration plan. This is what we most often see companies doing.”

Moreover, added Selipsky, “Companies will be operating in hybrid environments for years to come. We see some companies putting some stuff on AWS and then keeping some stuff in-house. And I think that’s fine. It’s a perfectly prudent and legitimate way of proceeding.”

Myth 5:  Cost Is the Biggest Driver of Cloud Adoption

“There is a big savings in capex and cost but what we find is that one of the main drivers of adoption is that time-to-market for ideas is much faster in the cloud because it lets you focus your engineering resources on what differentiates your businesses.”

Overall, regarding these myths, Selipsky said he believes “a lot of this revolves around psychology and fear of change, and human beings needing to gain comfort with new things. Years ago people swore they would never put their credit card information online, But that’s no longer the case. We’re seeing great momentum. We’re seeing, more and more, over time these barriers [to cloud adoption] are moving.”