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HubSpot latest to leave Amazon Web Services -- mostly. Should Amazon worry?

Nancy Gohring | April 18, 2013
HubSpot is the latest to announce it’s shifting workloads off AWS

Shannon McFarland, a principal engineer at Cisco, had an interesting take. He said that some companies now have the kind of data that lets them more accurately consider the OpEx vs. CapEx question.

These are businesses where IT departments have essentially been exploiting a "loophole" that makes it look like they've reduced CapEx when in reality they really haven't. For instance, an IT organization might be under orders to reduce CapEx and to do so might hire a system integrator that essentially spreads out the cost of a hardware and software investment into monthly payments.

"CFOs have figured this out," McFarland. The upside is that for businesses that also have some experience using public clouds, CFOs can use that data to better understand how the cost of a private cloud compares to a public cloud, he said.

Jeff Dickey, senior vice president of cloud solutions for Redapt also said he's seeing businesses move their clouds in house because AWS is proving expensive. Their primary reasons for building private clouds: cost, control and security, he said.

Businesses of all sizes are considering internal clouds but it makes the most sense for large companies, he said.

Other businesses are "trying to get out," he said. AWS has made its compute services very sticky by making them difficult for users to remove workloads like databases to run them elsewhere.

Regardless, most companies are leaving some work loads in the public cloud like AWS, he said. For users of Rackspace's public cloud, he'll help get the hardware set up and then Rackspace may offer its support services

Several people I had breakfast with said that they are hearing customers tell them that AWS is reducing costs for individual businesses in an effort to keep them. That's not so uncommon in the vendor world, where many costs are negotiable depending on the size of the business. But I'm not sure if this is a new trend from AWS or if it's been reducing prices on a case by case basis all along.

While some of the people I talked to stand to benefit from work moving off public clouds, others didn't. It's impossible to know whether a significant number of businesses are deserting AWS and public clouds in favor of private. My guess is there's some movement as businesses get more experience in the cloud but certainly not enough to dent the potential of the public cloud. Still, the murmurs are an indication that AWS competitors are starting to get more aggressive.


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