Amazon's AWS Chief: Cloud Services Party Just Getting Started

"I can tell you that after seven years of being in the market, with hundreds of thousands of customers in 190 countries, ... we are much better at this today than we were seven years ago," Andy Jassy, senior vice president of Amazon Web Services, said Tuesday at the opening of the AWS Summit 2013 in downtown San Francisco.

Amazon Web Services has expanded beyond cloud servers, storage and databases to include networking, data warehousing and application services. "Literally every imaginable application is now running on top of AWS," Jassy said.

[Related: AWS Summit: New Cloud Avenues Open Every Day ]

RedShift, the data warehousing service Amazon introduced in February, could significantly alter the economics of a market where Oracle, IBM and HP are among the big players. At $999 per terabyte annually, RedShift is one-tenth the cost of traditional data warehousing offerings, and Amazon handles all of the scaling and management, Jassy said.

David Blankenhorn, chief cloud technologist at DLT, a Herndon, Va.-based government VAR, told CRN his customers are using AWS for everything from financial apps, geographic information systems, big data analytics and high-performance computing. "There's been a lot of recent buzz about AWS targeting enterprises, but I've got news for everyone: the 'enterprise' is already using AWS," he said.

In Amazon's view, the private cloud space is little more than legacy vendors trying to convince customers that public cloud infrastructure isn't safe enough for corporate data. The problem with the private cloud approach, Jassy said, is that it's not tuned for scalability, self-service provisioning and chargeback.

"Why are so many old guard tech companies telling enterprises to build private clouds? Because the model Amazon Web Services is pursuing is very disruptive to them," Jassy said.

Amazon is aware, though, that most enterprises aren't ready to dive whole-hog into public cloud just yet. That's why Amazon has added support for Microsoft Active Directory, encryption services and applications that reside on a company's premises but back up their data to the Amazon cloud, Jassy said.

Amazon also holds all the certifications and accreditations that matter to enterprises, including SOC, PCI, ISO 27001 and HIPAA, among others, Jassy said.

Jassy said the traction Amazon is getting with enterprises is just one key to its success. Amazon is now adding new features and updates at a rate faster than any other time in its history. In fact, Jassy said, the pace at which Amazon has done this has accelerated every year since 2007.

Amazon has cut its pricing for AWS 31 different times, while other enterprise vendors have pursued a model that involves "charging as much as they can," Jassy said. Amazon also sends customers regular email alerts to show them how to cut their bills through a service called Amazon Trusted Advisor.

The service uses technology that checks customer usage of AWS and recommends ways to increase security and availability and cut costs by moving workloads or powering down idle instances.

"We work relentlessly to take cost out and give you lower prices," Jassy said. "How many tech companies will call you and say you should be spending less with us?"

PUBLISHED APRIL 30, 2013

This story was updated on April 30, 2013, at 3:10 p.m. PST, to include comments made after press time by DLT's David Blankenhorn.