Amazon Web Services (AWS) has more than one million cloud customers and its flagship services, such as S3 (storage service) and EC2 (infrastructure service), are growing at 137% and 99% per year respectively.
The company revealed the figures at AWS re:Invent 2014 in Las Vegas this week.
Amazon has been criticised in the past for secrecy over the growth of its cloud business and has yet to declare revenue figures for AWS in its financial statements.
“Users also include more than 900 government agencies such as the Navy, Intelligence Security Agency, and academic institutions,” said AWS vice-president Andy Jassy at the opening keynote to 13,500 delegates.
Jassy said enterprise cloud adoption is accelerating quickly. “Cloud has become the new normal. Private cloud or self-built ones will slowly become extinct,” he said.
Jassy said companies are using AWS to innovate, expand business, save costs and improve their time to market. In a traditional datacentre scenario, it takes 10 to 18 weeks to procure IT equipment for any new project and it can be disappointing for employees brimming with ideas as it takes a long time to see it materialise, he claimed.
“With cloud you could spin up thousands of servers in minutes and go from idea to launch in record time. Cloud changes how companies think about innovation,” he said.
Jassy also warned how long-standing businesses are being challenged by cloud-based startups in their industries.
“Look what Airbnb has done to the hospitality segment, or Spotify to the music industry or even Dropbox to the storage market,” he said.
“These are all businesses built on the cloud, which disrupted the big ones in their own segments. So as an enterprise you don’t have an option to be slow.”
In his keynote speech, Jassy gave insights into how enterprise customers are adopting AWS cloud. While there is no uniform pattern in AWS adoption, the company has been noticing some trends, he said. Typical workloads that users are migrating onto AWS platforms include:
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Development & testing
Typically the first set of workloads are the development and test environment workloads, said Jassy. “This is really a no-brainer," he said. Large companies such as CA, Lionsgate, Alaska Airlines, and Fidelity continue to run test and development instances on AWS.
New, cloud-native applications and workloads
The second wave of user adoption revolves around new application and workloads that can be cloud-native. This means they can be designed and built from the scratch for the cloud.
“These are easy to migrate to the cloud and benefit from features such as agility and scalability because these apps don’t come with any legacy baggage,” Jassy said. Enterprises such as Siemens’ new healthcare system, GE, and Boeing with its supply chain application, are using the public cloud for newer workloads.
Websites, digital and mobile apps
Another set of workloads that follows this are related to website and digital transformation. Companies including Unilever, US Navy, Singapore Post and Discovery Communications are using the cloud for running their web applications or new e-commerce workloads.
Data analytics and warehousing on the cloud
After finding success and gaining confidence on the cloud and reaping benefits, enterprise customers are starting to run important workloads on the cloud, Jassy said. He cited big-name brands from highly regulated segments using the public cloud for data analytics.
“They are keeping the data to themselves but turning to AWS to do analytics quickly and save costs," he said.
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For instance, in the UK, the Financial Times picked AWS RedShift for its data warehousing tasks and reduced data processing time by 98% and costs by 80%. Following the success of using data warehousing for its subscriptions data, the FT is planning to increase AWS use for analysing advertising data on the cloud to build new revenue models.
Other businesses using cloud for analytics are Docomo, Aon, Pfizer and German insurance company Talanx.
“Talanx, as an insurer, is mandated to run Solvency II calculations to see the insurance health of its customers,” Jassy said. “They run those calculations on AWS and are 70% faster and 60% less expensive, saving about €8-9m.”
Billing cloud as one of the significant technology transformation of our lifetime, Jassy said enterprises from heavily regulated segments such as banking and financial services, oil and gas, insurance and ticketing services are all migrating business-critical workloads on to AWS.
“For instance, British Gas runs its application that allows users to control central heating remotely on AWS. National Rail Enquiries run their applications on AWS,” he said.
To facilitate more enterprises from heavily regulated industries to adopt AWS, the company is rolling out more regional datacentre facilities. Last month, it launched the AWS Frankfurt region.
A region features multiple datacentres in the same geographical zone so users can store and replicate data in their own region and remain compliant with data sovereignty regulations.
Many enterprises are now looking at migrating entire datacentres on to the public cloud
Andy Jassy, AWS
The next wave is mobile apps, he said, revealing more user adoption trends: “Most users consume business applications on the move via mobile devices,” he said. This has prompted large enterprises such as Tata Motors, Alcatel Lucent, HTC, Newsweek, Vodafone Italy, and Quantas Airlines to build mobile-friendly services on AWS.
Business-critical apps and all-in-the-cloud
“And then comes the business critical apps,” said Jassy. “The apps that are most critical and most painful in terms of migration because of their legacy background.”
But it is happening, he said. CondeNast, for example, has migrated its critical HR and finance workloads to AWS, while in Europe, the Dutch bank regulator has approved AWS for use in the banking and financial segment.
“There is no use case that is not worthy of the cloud,” Jassy said, but he added that, for enterprises operating certain workloads that require a sub one-millisecond latency and do not have an AWS datacentre near the premises to host that workload, on-premises infrastructure is still the best bet.
High-profile AWS users
Spotify, Airbnb, Shell, BP, Suncorp, Johnson & Johnson, The Financial Times, Pfizer, Vodafone, Samsung, Netflix, Dow Jones, New York Times and The Weather Company
“But there are few workloads with sub one-millisecond latency requirement,” he said.
According to Amazon, there is a new trend in public cloud adoption. “Many enterprises are now looking at migrating entire datacentres on to the public cloud,” Jassy said.
News Corp, CondeNast, The Weather Company and Hess have all reported better performance and cost savings by switching off many of their in-house datacentres. News Corp is moving as much as 75% of its internal workloads onto AWS and reducing its datacentre footprint from 45 to just six.
“Netflix moved all-in on the cloud a couple of years ago,” Jassy said. “It was ground-breaking at that time but not anymore. Today, Sun Corp, Time Inc, Emdeon, Nippon Express, Kempinski, and software firms such as Splunk, Infor, Acquia, Informatica, and Pega are all fully embracing the cloud and this trend is accelerating at a fast rate.”
He said AWS is also addressing security concerns over the public cloud: “For those that still worry about security on the cloud, encrypt your data and if it is secure enough for [AWS customer] the CIA, you’re going to be all right.
“One thing is sure, five years from now, few companies will operate datacentres. We are at the beginning of a titanic shift and lot will transpire in the next few years. Those that do have datacentres will operate on a very small footprint.”