re:Invent - AWS Amazes in First User Conference

AWS Re:Invent User Conference

The first AWS Re:Invent User Conference last week was a fascinating show, not so much for the novelty of a user conference – all major players have one these days – but for some of the facts that emerged from both Amazon and industry analysts.

AWS typically keeps its revenue figures close to the vest, but has created something of a proxy with its comments about “Daily Capacity Add,” or the amount of compute power that AWS adds world-wide each day. The original figure which came out 18 months or so ago was that AWS added the same amount of capacity each day as its total capacity in the year 2001, when it was a $2.8B operation.

That number was fairly astounding – one imagines a datacenter the size of the main floor at some mega-conference space like Jacob Javits or Moscone – but last week AWS upped the ante by equating its current daily growth to the size of Amazon in 2003, when it was a $5.2B operation. The apparent 86% increase in Daily Capacity Add gives one indication of the size and growth of AWS: we’re now into multiple football fields of datacenter being added each day. Pretty amazing.

One of the big contributors to AWS growth is Netflix, whose streaming movie service has been quoted in the press as consuming 1/3 of all the internet bandwidth in the United States! Netflix CEO Reed Hastings said in a Keynote session that in 2008 Netfix was streaming about 1 million hours per month: it’s now over 1 billion and growing fast.

Also impressive was Amazon’s plans for new functionality. Gartner already positions AWS with the largest lead I’ve ever seen in both Vision and Ability to Execute in its latest Cloud Provider Magic Quadrant rating, and the giant of the cloud industry plans to add 158 new features in 2012, up from 81 in 2011.

One of the most intriguing new features is the RedShift columnar database service. Seemingly named for an astronomical phenomenon, it’s a radical new approach for data warehousing. It’s an almost DBA-free database service that you purchase by the server instance, and it’s priced at less than $1000 per TB per year, compared to what IBM says is an industry average of $19-24K/TB. We’ll get our hands on it within a week or so, so watch for another blog entry.

Gartner VP of Research Tiffani Bova gave one of the more interesting presentations at the conference. She noted that Gartner has found that 63% of all IT spend is just to keep the lights on (i.e. Infrastructure). They expect that nearly 50% of IT spend will be controlled outside of IT in coming years - primarily by Marketing organizations - which in many cases already command over 30% of the technology budget.

Further on the research front, there were numerous mentions of the recent IDC study of 11 large AWS clients, which was commissioned by Amazon to determine the business value of switching to AWS. I’d heard the “70% Savings” quote before, which dovetails nicely with AWS’s long-time position that only 30% of the cost of computing is for the server, while 70% goes to the “heavy lifting” of IT provisioning, operation and maintenance. So a 70% saving is like getting your entire infrastructure for the same 30% cost of a server.

Other statistics from the IDC report are almost equally impressive: - a 72% reduction in downtime - an increase in software development productivity of 507% - average annual savings per application of over $500K

AWS Chief Andy Jassy announced more potential for cost savings with a 24-27% price decrease on the S3 storage service, extending the AWS streak of 23 price cuts since inception. Considering that there are over 1.3 trillion objects currently stored on S3, AWS is taking a large immediate hit in revenue on this pricing action - as they have on all previous decreases - but they’re determined to stay competitive with the market.

To keep up with the expected business demand in the US, AWS has tripled its sales force to over 100 reps this year, and expects another 50% increase in 2013. But the sheer force of leads – literally thousands per month – has them relying heavily on partners.

Which is good news for Full 360, since AWS just named us as one of the first Premier Partners in the US, their top category. There are only 15 Premier Amazon Partners, ranging from our “boutique” scale up to Top-5 consultancies. But none of them has our combination of cloud, BI, Hyperion and column database expertise, so we expect to work closely with AWS in 2013 to move more and more companies to the Cloud.


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