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What's Amazon's enterprise strategy for the cloud?

Brandon Butler | Dec. 5, 2012
Roaming the floor of Amazon Web Services' first user conference last week, it didn't look like a traditional tech show. Many of the 6,000 attendees were with startups or midsize businesses looking to learn more about AWS services or the public cloud.

Bharat Shyam, CIO for the state of Washington -- a state with 64,000 employees that serve 6 million residents -- says "governments tend to be very risk averse," which is why no personally identifiable information (PII) of Washington state residents have been placed in AWS's cloud by his staff. He does use AWS services for disaster recovery, backup and some applications, though. For example, the state's traffic advisory system can experience a tenfold increase in usage during heavy storms. Using AWS's services allows the application to scale up virtual machine instances as needed, which means users get the most current information possible.

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Intuit, a $4 billion publicly traded company that makes TurboTax and other small-business accounting products, is in a similar situation. Troy Otillio, the company's cloud strategist, first suggested using AWS cloud resources directly after the company had just set up a new data center but the company quickly outgrew the capacity. Migrating workloads to the cloud after just making a large investment in dedicated infrastructure was not warmly received at the company, he says, but it seemed like an even better idea after the data center experienced two outages. Soon thereafter, Otillio migrated about a dozen applications into AWS's cloud, but none that had PII data of customers in them.

One of the biggest advantages of using the cloud, he says, is the speed and agility the company has in being able to try new products and applications, host them in AWS's cloud, spin them up when they launch, scale them as they grow, or terminate the resources if it is not well received in the market. Startup competitors use AWS and have been doing that. Now that Intuit has the same access to dynamic resources, he feels the playing field is leveled. "They move fast, now we can too," he says.

Despite stories like these, some believe that AWS still has a long way to go before it's truly considered an enterprise company. David Linthicum, a SOA and cloud computing consultant at Blue Mountain Labs, says working in the enterprise market takes special attention from vendors. Enterprise IT decision makers want to feel comfortable with their vendors; they want open lines of communication and sometimes special attention. Amazon.com and AWS, Bezos says, are "dwarfed" by the salesforces of competitors, though, which is why the company's chief says Amazon has to compete on products and services. Linthicum questions if that will be enough.

"Enterprises are used to relationship selling, and special treatment," Linthicum says. "They will sign multimillion-dollar deals with cloud providers, but enterprises will need a traditional sales process to drive the larger strategic deals. This is not to say that AWS, and others, won't get a good bit of business from the bottom up, but most of the larger, more strategic deals will come from relationships with IT leaders, not developers and engineers. Good technology will only take you so far."

Selipsky, the AWS marketing chief, says the company has made a concerted effort to focus on the enterprise in recent months. Whether that's enough will certainly be a big question to watch in 2013.

 

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