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Q&A: Amazon on Enterprise Computing in the Cloud

Speaking at this week's Enterprise 2.0 Conference in Boston, Amazon's Adam Selipsky says enterprises are already embracing the agility and economies of scale of cloud computing.

Adam Selipsky Adam Selipsky

Among the earliest proponents of cloud computing, Amazon is also the market's pioneering provider, with services including Amazon Simple Storage Service (S3), Amazon SimpleDB, and the Amazon Elastic Compute Cloud (EC2). Speaking at this week's Enterprise 2.0 Conference in Boston, Adam Selipsky, VP of Product Management, Amazon Web Services, asserts that enterprise IT is already being drawn into the cloud.

You're on a panel at the Enterprise 2.0 conference in which they'll pose the question, "have we reached a tipping point where all of IT, including custom applications, can be moved into the cloud?" What's your answer?

I'm not actually going to say that I think all IT needs can and will run on the Cloud. We've built our services to be extremely flexible and open, because there's incredible heterogeneity out there, but it would be pretty preposterous to claim that we can cover 100 percent of computing needs. However, we do think that a huge swath of applications and a huge swath of developers can and will move into the Cloud.

Why is cloud computing attractive?

There are at least three big reasons. First, if you consider storage, compute capacity, databases, payment processing and everything needed to run a business, it all requires a bunch of heavy lifting. It can stop your business if it breaks, yet it really doesn't bring any value to your customers. Nobody cares where a photo management site stores photos, but without that capability, the application breaks. So it's a lot of work, and a lot of exposure, yet there is very little payback. Not having to worry about that muck — being able to focus on product development, sales, figuring out your strategy, and so on — is a much, much better use of time for most businesses. So that's one big reason why there's so much IT activity trying to move into the cloud.

Another reason is pure economics. [Amazon] is running a set of services that are large, rapidly scaling out and that are balancing the peaks and valleys of many, many customers with very significant [compute] volumes. We have very high asset utilization and, therefore, relatively low cost per unit of hardware, per unit of bandwidth and so on. We can pass the savings on to customers in the form of low prices, whereas, if you're sitting on a bunch of hardware that you're using at 10-percent or 15-percent utilization, which is normal for most enterprises, then you're not being very cost effective.

A third argument for cloud computing is performance. We've been doing this for for more than a dozen years. We've had a lot of successes, we've made some mistakes and we've learned a lot over the years about what it takes to run reliable, fault-tolerant, scalable infrastructure services. There are not that many companies out there that not only have the capability to build services like this, but that have actually had to run them.

I want to get back to reliability, but first can you describe those "big swaths" of would-be cloud computing users, particularly among midsize and large enterprises?

There are just so many applications that are good fit, but I'll give you a few general examples. To start with, anything that operates on the Internet and that is customer facing is incredibly low-hanging fruit... Second, we're seeing great uptake for big data-processing applications, such as scientific computing, drug company clinical trials and hedge fund mathematical analysis. These are crunch-intensive applications where you need large amounts of compute capacity, but you mainly need it sporadically.

Very generically, anything that's a spiky application is incredibly compelling to put in the Cloud because you can tap into, say, 500 machines to handle data processing for a week and then shut it down until you need it again. It's just incredibly efficient to be able to do that by just paying by the hour.

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