TAIWAN — The world descended yesterday on Computex once again so that companies both large and small could show off their products and services as they hope to grow their businesses. Shane Owenby the managing director of Amazon Web Services in Asia Pacific talked to the audience about how cloud computing has re-invented the world of IT.
Amazon Web Services (AWS) global reach and scale has freed many enterprises from running a lot of IT functions in house, he says. Owenby likens the new cloud based IT as a utility rather than a department “allocating capacity when there is a need and giving it back when there isn’t.” Since Amazon AWS started in 2008 they supported just 24 services. Last year alone, it had 280 services and updates launched.
To get a clear idea of how large AWS has become, Owenby said that its team “add enough new service capacity every day to support Amazon’s global infrastructure when it was only a $7 billion business.” The reason that customers are moving to the cloud is to avoid big up-front capital costs on buying IT hardware.
Since Amazon started its cloud computing business in 2008 it has made 42 price reductions, he says that because of Amazon’s sale they can take price out of their supply chain and pass on those savings directly to their customers.
By going to the cloud, Owenby says you don’t have to guess the capacity you need because you only pay for what you use. This variable pricing model allows for a level of flexibility that would otherwise be unachievable by a company on their own because of the cost.
By moving to the cloud businesses can significantly increase their speed and agility, he says. They are no longer dependent on running their own IT department and can add or remove capacity as needed that would be hard to achieve by setting up and managing their own IT in-house.
They would be less willing to experiment because the cost of failure is so high leading to less innovation. Moving a firm’s IT to the cloud provides flexibility that encourages experimentation because of their low costs helping to spur a culture of innovation.
Owenby says that since you are only paying for what you use and you are not buying equipment or paying personnel, you can divert those IT resources to your core business and can lower the total cost of IT.
This means you can stop spending money on what Owenby calls “undifferentiated heavy lifting.” These are the costs associated with IT spending that doesn’t have to do with your core business but supports it which is many of the IT functions that AWS has pioneered.
Owenby asks why any company should take on those functions when an expert company like Amazon or the others out there can and will do it at a fraction of the cost.
AWS goes beyond providing your standard IT services, they have the scale and experience to provide their customers with customized services and solutions that would otherwise be cost prohibitive on their own.
Owenby says that “time to market is the key to success or failure.” Cloud computing allows companies to go global in days, not months or years which in a rapidly changing competitive environment could be reason enough to make cloud a core part of your IT strategy.
Owenby goes through several case studies based on strategies that enterprises are using now on AWS. Entertain distributor Lionsgate uses the AWS cloud for develop and test environments which decreased deployment from weeks to mere days. Building new apps for the cloud made the company’s applications cheaper to run and easier to manage.
You can make on-premise apps better through the cloud which can provide real-time analytics, backup capability and improved security, Owenby says. NASDAQ uses this to export operational data to AWS for analytics processing.
New cloud apps can also do the reverse and integrate back into your legacy back end systems, which Samsung Corp. does to serve up content while linking back to their own data centres for financial transactions.
Take existing apps and migrate them to the cloud which News International did, replacing a third of their servers to AWS saving the company 1-1.5 million GBP. Or you can go all-in as Netflix has done, they use hundreds of mid-tier services to support their users which in the United States at peak consumption accounts for a third of all Internet bandwidth.
Cloud computing continues to disrupt the technology industry, providing scale to startups or flexibility to fortune 500 companies at a fraction of the cost they could do themselves. Owenby says no matter who you go with “you want a complete cloud solution.”