'Cloud computing making waves'

Posted on December 13, 2010 | Author: Chiranjoy Sen | View 959

It has been almost five years that the world’s largest online retailer, Amazon, decided to move into the web infrastructure services space, offering a new way to run any business that used technology. No upfront expenses or longterm commitments and pay only what you use was what Amazon proposed. That may sound familiar today, thanks to cloud computing but it was a novel, unheard of concept then. And for Werner Vogels, chief technology officer of Amazon Web Services — the cloud computing provider born out of the e-retailer — the adoption rate of this new technology services has been breathtaking, beyond expectations. “It is happening much faster than it was anticipated,” he says. 

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What’s the unique selling proposition of these services?
“Our technology infrastructure services have grown rapidly since the first launch.
Looking at the launches over the years, a few things are unlike old world technology companies.
Our pace of innovation is quick because our approach to innovation is to release a service when it is useful to developers and businesses, then quickly adding new features and services based on customer feedback.
Moreover, with our pricing model and pay-as-you-go, customers can flexibly choose the payment structures and services that best meet their business requirements,” Vogels says. 
The pace in adoption is tied to tech executives’ changing perception about cloud computing.
Vogels explains: “Now, chief information officers of firms are thinking about cloud computing strategically.
Many CIOs are initially attracted to cloud by the financial model; it eliminates the need for capital and also reduces operational cost, because if you no longer need resources you can release them.
But as soon as enterprises begin to use cloud in a big manner, they start citing flexibility and unconstrained thinking as the major advantages, “ adds Vogel. 
“The financial services industry is among the early adopters of Amazon Web Services as the firms at Wall Street need the flexibility to instantly access and scale the capacity up and down whenever they require to run their mission-critical applications.
They also benefit from the cost efficiencies for completing more of their processing at a lower cost.
They need not over-provision excess capacity,” points out Vogels.
Elaborating, he says investment banks and hedge funds are heavy users of algorithmic trading, while a rising number of trading houses run overnight modelling simulations on Amazon Web Services to get a competitive edge for the next trading day. 
With the e-commerce market evolving in India, Vogels says, “there are fast growing interests in India, especially with millions of SMEs, start-ups as well as software developers in India who are developing and testing new ideas.”
The early adopters for Amazon Web Services in India, says Vogels, have grown fast because they have enabled them to test ideas quickly, innovate fast and reach out to a wider range of customers. and Hungama Mobile are major examples. 
But what about the bigger enterprises in India?
“They are beginning to realise the benefits and taking steps to test development work and projects to learn how to work on the cloud.
What most enterprises are doing is they are moving more methodically. They pick up diverse applications to try as proofs of concepts in the cloud.
They run them from a few weeks to a few months to see how the cloud is different and understand how they could operate inside the cloud,” says Vogels. 
Amazon has, meanwhile, taken steps to ease the migration to cloud. “A typical medium to large enterprise easily has between a few hundred and a few thousand applications to maintain,” he says.
“Many of these applications have dependencies on each other. Teasing those dependencies apart, and finding out which pieces of the puzzle are suitable for moving to the cloud, is not a trivial operation.
I see companies investing a lot of effort trying to classify what those dependencies are, what the risks are associated with moving applications to the cloud, and how much work it would take to move an application into the cloud,” he adds. 
Technology spend in the North America and Europe have picked up. There is great momentum happening across the world now and that is because there is a change in the way companies have acquired IT, Vogels says.
The cloud services market, to boot, is likely to grow to $148.8 billion in 2014 from $58.6 billion in 2009.

Werner Vogels

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