Zynga will sell cloud infrastructure-as-a-service to other game makers who want a hosting platform. With this innovative play, Zynga just became Amazon's competitor.
Zynga, owner of eight of the ten most popular social networking games on Facebook, is expanding its business to offer a game hosting platform, providing the technology on which other game makers can launch and run online games.
Zynga is not the first company to build out cloud computing infrastructure-as-a-service, but it's the first to produce an infrastructure that's uniquely geared to the burgeoning online game industry.
This move reminds me of how Amazon.com went from selling books to serving as an all-around online retail store, then to selling and shipping other retailers' products, and finally to supplying raw computing infrastructure-as-a-service. You could also compare Zynga's plan to the New York Stock Exchange's efforts to sell cloud computing services to financial traders: Both Zynga and NYSE are trying to sell computing services finely tuned to an industry need.
With the move, Zynga has swiftly moved from being highly dependent on Amazon to becoming its competitor in the cloud infrastructure services market. Just 12 months ago, Zynga relied on Amazon for 80% of its computing capacity, running only 20% on its own data center. Since then, it has flipped that percentage to rely on Amazon for just 20%. Investors, who have been complaining about Zynga's successive quarterly losses, should be heartened by that trend, which bodes well for Zynga's long-term prospects.
Another advantage is that Zynga understands how a modern social networking game business should operate. Zynga's games share many common functions--such as "notify other players of this move"--so that much of the underlying logic and services can serve more than one game. In equipping its data centers, Zynga built and organized arrays of servers to perform different functions--for example, huge memory servers for caching content on Web servers; high I/O servers to process database calls; and CPU-intensive servers to execute complex game logic. Other arrays serve as high-speed firewalls, load balancers, or switching mechanisms. (Zynga lets wholesalers build and operate data center facilities, then equips its space the way it wants.)
For more on Zynga's innovative approach to big data and the cloud, check out this interview with CTO Allan Leinwand:
Zynga's move away from Amazon into its own zCloud infrastructure has been hailed as proof that enterprises can build private clouds and profit from their use without relying on the public cloud. But Zynga differs from most conventional enterprise IT data centers in some critical ways. First, Zynga has designed its data center arrays as a single computer serving one application: the collective, underlying logic and services that run its games. If you know your application as well as Zynga does, you can arrange server arrays like components on a circuit board, bringing to life Google's view of "the data center as the computer." In this way, Zynga says it has reduced the number of servers to one-third of what it had been using in Amazon.
Google in the Enterprise SurveyThere's no doubt Google has made headway into businesses: Just 28 percent discourage or ban use of its productivity products, and 69 percent cite Google Apps' good or excellent mobility. But progress could still stall: 59 percent of nonusers distrust the security of Google's cloud. Its data privacy is an open question, and 37 percent worry about integration.