Amazon's AWS cloud business made $500m in sales in the first quarter of 2012, up $189m from the same quarter last year.
The cloud operations represents just 3.79% of the online retail giant's overall business, which reported revenue of $13,185 for the quarter that ended March 31 2012, an increase of 34% over last year's first quarter results. However AWS appears to be the fastest growing area of the business, reporting 61% growth compared to 43% in the electronics business, and 19% in media.
Founder and CEO, Jeff Bezos, highlighted the success of the Kindle Fire. He said in the first quarter, nine out of 10 of the top sellers on Amazon.com were digital products – Kindle, Kindle books, movies, music and apps.
Amazon has been running a conference in the UK to show why cloud economics makes sense. It is selling the idea of the Amazon cloud as a way for IT to keep up with business demands.
Supercomputing by the hour
Computational chemistry research firm Schrodinger, in collaboration with Nimbus Discovery, is using a supercomputer cluster from CycleComputing, which runs on the EC2 Amazon infrastructure, for cancer research. The application uses brute force analysis.
CycleComputing built a 50,000 core utility supercomputer code-named Naga, which was provisioned on Amazon Web Services. Naga runs across each of the seven regions worldwide that AWS supports, scaling-out all supporting systems of a cluster (scheduling, software configuration, etc). The supercomputer uses idle capacity on AWS. The company's CycleServer job scheduler monitors the AWS computational capacity in real-time to deploy computational workloads for the Schrodinger application.
Altogether, Schrodinger required $20m of IT infrastructure running for three hours. The cost on AWS was $4,828 per hour, meaning the cost of running the Naga supercomputer application was $14,484.
Innovating in the cloud
During his keynote at the conference, Werner Vogels, chief technology officer at Amazon said cloud computing was not only about addressing cost: “Hundreds of thousands of businesses are using AWS today. The US federal government has a cloud first strategy and over 100 US agencies are using AWS.”
He said oil company Shell was using AWS to innovate, because traditional IT was a roadblock to innovation. Lionsgate, the film company, is running 18 of its 27 SAP systems in the Amazon cloud. The ERP system includes accounts payable, accounts receivable, general ledgers, and business intelligence applications, as well as their entertainment-focused metadata and rights management systems.
Vogels claims Amazon's approach to providing enterprise IT is a departure from tradition software firms. He told delegates that, in the past, a business would negotiate a long-term contract to get the best discount from their provider. He claims Amazon's approach is more customer friendly. “We have a strong belief to break free of being locked into software providers for a very long time,” he said.
Making AWS private
Attila Narin, senior manager, solutions architectures at Amazon Web Services, said another use case is Haven Power, which runs a redundant datacentre on AWS. As part of the disaster recovery plan, Haven Power built a replica copy of most of its technology infrastructure in the AWS cloud. These include Oracle and SQL Server databases, Active Directory, Microsoft Exchange, Windows file shares and other Amazon Machine Images hosted in an Amazon Virtual Private Cloud (Amazon VPC) in the AWS EU West Region in Dublin
The virtual private cloud (Amazon VPC) option lets IT managers provision a private, isolated section of the Amazon Web Services (AWS) Cloud.
Narin said the company also offers DirectConnect, which allows businesses to connect their private networks directly into an AWS datacentre.
Although Amazon VPC provides customers a dedicated piece of the AWS cloud, experts point out that workloads are still running outside customers’ firewalls. This is a limitation as many customers demand private, on-premise clouds to run mission-critical workloads.
In the first quarter of 2012 AWS focused on launching products to better meet enterprise customer demand. The launches of Amazon DynamoDB, Amazon Simple Workflow Service (SWF), AWS High Performance Computing updates, and private cloud deployment options provide AWS the sophistication needed to address enterprise concerns around scalability, cloud management, security and control, according to analyst Technology Business Research (TBR).
The firm noted that AWS delivers these features without the cost associated with traditional deployment infrastructure. TBR believes the combination of these factors will allow AWS to grow its enterprise footprint in 2012; however, AWS’s enterprise success in will hinge on the satisfaction of early adopters
Through its partnership with Eucalyptus Systems, AWS enables users to migrate between their datacentres and AWS cloud services. “Eucalyptus software is used by 20% of the Fortune 100 companies, increasing the opportunity for AWS to penetrate the enterprise as customers expand into public clouds,” TBR noted.
From the architecture and strategy Vogels and the team at AWS have presented, Amazon's cloud service is more than simply computing on demand (EC2), storage on demand (S3) and database on demand (DynamicDB). AWS is increasingly becoming a cloud software platform, on which cloud applications are being developed.
According to Vogels, SAP and Oracle have modified their software to be aware of multiple availability zones in the AWS cloud for fail-over. The recently launched AWS Marketplace is the next step in the evolution of the Amazon cloud, to a full platform. The company claims the online store will make it easy for customers to find, compare, and start using the software and technical services they need to build products and run their businesses.