Amazon Web Services

Amazon Lifts Curtain From Amazon Web Services Financials And Reveals $5B In AWS Annual Revenue

After submitting the tech analyst community to years of speculation about the precise revenues of Amazon Web Services, Amazon took the lid off its financials on Thursday to reveal that its cloud computing business does over $5B in annual revenue. In the first quarter of 2015, Amazon Web Services generated $1.57B in revenue while sustaining operating expenses of $1.31B, leaving $265M in operating income. The $1.57B in revenue earned by Amazon Web Services in the Q1 of 2015 exceeds the $1.05B the company earned in the first quarter of 2014 and illustrates year over year revenue growth of 49%. Meanwhile, AWS’s $265M in operating income from Q1 of 2015 surpasses the $245M in operating income specific to Q1 of 2014 by 8.1%. In 2014, Amazon Web Services garnered a net operating income of $660M based on the aggregate of $245M, $77M, $98M and $240M in Q1, Q2, Q3 and Q4 of 2014, respectively.

Amazon CEO Jeff Bezos commented on the financials of Amazon Web Services by noting:

Amazon Web Services is a $5 billion business and still growing fast — in fact it’s accelerating. Born a decade ago, AWS is a good example of how we approach ideas and risk-taking at Amazon. We strive to focus relentlessly on the customer, innovate rapidly, and drive operational excellence. We manage by two seemingly contradictory traits: impatience to deliver faster and a willingness to think long term. We are so grateful to our AWS customers and remain dedicated to inventing on their behalf.

Here, Bezos proudly comments on the growth of Amazon Web Services and its track record of innovation and commitment to operational efficiencies and excellence. Created in 2006, the company has revolutionized cloud computing within less than a decade and launched, within the first quarter of 2015 alone, products such as AWS Lambda, support for Docker via the Amazon EC2 Container Service and Amazon Machine Learning. As a subsidiary of Amazon, AWS’s revenue of $1.57B represents a significant percentage of Amazon’s total $22.7B in revenue but AWS will need to be concerned that its 49% year over year revenue growth for Q1 of 2015 marks a sharp decline from year over year growth for Q1 of 2014, which was 69%. The decline in year over year revenue growth points to the emergence of other market players such as Microsoft Azure, Google Cloud Platform and Rackspace as detailed in a recent 451 Research Group report, all of which will continue to challenge AWS for market supremacy in the IaaS space in the months to come, even though AWS remains the clear front-runner, hands down.

Categories: Amazon Web Services, Cloud Computing Market Share, IaaS

451 Research Group Report Shows AWS Leads IaaS Space Amidst Increased Competition From Microsoft Azure And Rackspace

According to a 451 Research Vendor Window assessment, the battle for IaaS leadership has intensified even though Amazon Web Services (AWS) remains the clear front-runner. Respondents to the 451 vendor evaluations revealed that 57% of enterprise customers use AWS whereas Microsoft Azure is used by 42% of customers. AWS was cited as the most important customer in 35% of all cases, ahead of Microsoft Azure, which garnered 20% of votes in the same category. Rackspace earned the highest ratings for the IaaS vendor capable of fulfilling Guaranteed SLAs and was tied with AWS for its ability to fulfill customer needs. While AWS received high ratings with respect to Experience and Technical Innovation, Microsoft Azure, in contrast, was rated lower than most of its competitors with respect to Experience and Support for Open-Source Software. Meanwhile, in the private cloud market, the 451 Research Vendor Window Assessment found that VMware claims a presence in 70% of enterprises with its ESX and vCloud virtualization platforms. Nevertheless, the survey also found that more than 70% of VMware customers have deployed other solutions for private clouds such as OpenStack or Microsoft Cloud OS, for example.

Michelle Bailey, Senior Vice President, Digital Infrastructure and Data Strategy at the 451 Research Group, remarked on the significance of the findings as follows:

While the 2015 Vendor Window for IaaS shows Amazon Web Services as the clear leader based on multiple metrics, Microsoft Azure, Rackspace and VMware’s vCloud Air are becoming competitive challengers. As more mainstream customers move business-critical workloads to cloud environments, the decision criteria for evaluating potential vendors change relative to early cloud adopters, and in turn so do the vendors under consideration.

Here, Bailey notes how the IaaS assessment reveals the emergence of “competitive challengers” to the leadership role of Amazon Web Services as the criteria for IaaS vendor selection evolves in relation to the evolving maturity of cloud adoption within the enterprise. The bottom line here is that, even though Amazon Web Services remains the most widely used and, in many ways, respected vendor within the IaaS space, enterprises are increasingly reviewing alternative options to AWS, particularly as the space features an increasing number of robust options that can variously go toe to toe with AWS regarding attributes such as customer service and ability to support SLAs. More importantly, the battle for IaaS market share is likely to become even more competitive as the progressive maturity of Big Data technologies and analytics means that enterprises are likely to seek cloud platforms that can not only support, but also streamline and simplify the adoption of Hadoop and NoSQL. Regardless, exciting times are ahead for the cloud industry as IaaS vendors mature their product and service offerings in ways that give customers the confidence to select multiple vendors to minimize risks of vendor lock-in while concomitantly enriching their knowledge of the IaaS space by sampling the heterogeneity of offerings available on the market today.

Categories: Amazon Web Services, IaaS, Microsoft Azure, Rackspace

Amazon Machine Learning Renders Amazon’s Analytic Tools More Broadly Available

Amazon Web Services recently announced the availability of machine learning technology that allows developers to create predictive analytics by using the same algorithms that Amazon uses to manage its supply chain inventory and operations. Amazon’s Machine Learning platform empowers developers and data scientists with the ability to identify patterns and predictive analytics for data stored in Amazon S3, Amazon RedShift and Amazon Relational Database Service. By using Amazon Machine Learning, developers can obtain analytic insights without writing custom-built predictive analytics-based applications that require complicated scripting, debugging, code deployment and application management. In addition to enjoying the benefits of preconfigured machine learning libraries and wizards that accelerate access to pattern recognition and predictive analytics, Amazon Machine Learning enables customers to enjoy the benefits of a scalable platform capable of generating billions of predictions per day in real-time. Popular use cases for Amazon’s Machine Learning technology include the detection of fraud, the ability to personalize web-related content and deliver targeted marketing campaigns that iteratively become more effective in conjunction with the evolving sophistication of the predictive model. Amazon’s Machine Learning platform competes directly with Microsoft Azure’s Machine Learning platform that was released in public preview in July 2014. By rendering available the same technologies used by Amazon’s data scientists, Amazon adds yet another incentive for customers to leverage its ever expanding portfolio of cloud and big data products and services. The increasing availability of machine learning technologies underscores the democratization of analytics enabled by the contemporary cloud and big data revolution, even though many of the solutions available on the market remain proprietary and attached to usage of a larger IaaS platform.

Categories: Amazon Web Services, IaaS | Tags:

Amazon Offers Unlimited Storage Via Amazon Cloud Drive And Expands Amazon Prime Now

On March 26, Amazon announced two new storage plans for Amazon Cloud Drive that deliver enhanced options regarding the storage of files in the cloud. Both storage plans give customers the option of unlimited storage and take direct aim at cloud storage competitors such as Box, Dropbox and Google Drive. The Unlimited Photos Plan from Amazon Web Services allows customers to store an unlimited number of photos for $11.99 per year while the Unlimited Everything Plan allows users to store an unlimited number of files, whether they be photos, videos or other files, for $59.99/year. Both plans feature a free three month trial and disrupt the cloud storage landscape by giving away photo storage for less than $1/month and file storage for less than $5/month. Amazon’s prices beat Dropbox and Google Apps per Google Drive, both of which charge $10/month for 1 TB of storage for a single user.

Meanwhile, Amazon recently broadened its deployment of Amazon Prime Now by rendering its one hour delivery service available in 35 zip codes in the Dallas area. Amazon Prime Now provides one hour delivery for $7.99 or free two hour delivery for subscribers to Amazon Prime, which costs $99/year. With the addition of Dallas to its list of available cities, Amazon Prime Now’s deployment currently spans New York, Baltimore, Miami and Dallas. Taken together, Amazon’s new product offerings for cloud storage and its expansion of Amazon Prime represent aggressive steps to redefine not only the cost, but also the logistics of day to day operations such as file storage and e-commerce. Amazon’s new product offerings aim to lure cloud-averse customers to become more comfortable with its platform as Amazon attempts to choke not only Dropbox and Google Drive, but also the likes of eBay, Walmart.com and Target.com. By rendering its existing products and services more attractive, Amazon is also likely to benefit from spillover revenue as customers surf through and sign up for a broader range of its products and services. But the real benefit, for Amazon, from expanding the overall usage of its platform is the enhancement to the reputation of the Infrastructure as a Service that undergirds its dizzying range of products and services, and the corresponding affirmation the company receives to expand and upgrade its infrastructure fleet toward the end of expanding its business-facing cloud-based products and services.

Categories: Amazon Web Services | Tags:

Google Cloud Storage Nearline Promises To Disrupt The Economics Of Cold Storage

On Wednesday, Google announced the Beta release of Google Cloud Storage Nearline, a cloud-based storage product that transforms the economics of hot and cold storage. Whereas enterprises currently wrestle with the problem of managing frequently accessed data versus “cold” data, Google Cloud Storage Nearline renders cold data accessible within three seconds. The ability of Google Cloud Storage Nearline to access cold data means that organizations need not have separate infrastructures for managing cold and hot data but can instead leverage Google’s high performance, low cost storage solution to render historical data available within a few seconds. As a result, enterprises can serve up historical emails, audits and compliance findings, log files and data specific to decommissioned products and services with a virtually negligible time lag in comparison to hot data. Google’s product charges 1 cent per GB to store data within a framework that delivers enterprise-grade security, integration with Google Cloud Storage services in addition to the ability to collaborate with vendors such as Veritas/Symantec, Netapp, Iron Mountain and Geminare for services such as backup, encryption, deduplication, data ingestion from physical hard drives and disaster recovery as a service. In the context of the larger cloud storage landscape, Google Cloud Storage Nearline poses a direct threat to Amazon’s Glacier, a solution that is similarly priced at 1 cent per GB with a focus on cold data. Unlike Google Cloud Storage Nearline, however, Amazon Glacier requires several hours for data retrieval in contrast to three seconds. Google Cloud Storage Nearline addresses the data conundrum faced by the world today given the paradox that, whereas material objects such as garbage, newspapers and man-made products in general confront technologies for recycling and transformation, data has managed to demarcate a unique place for itself marked by freedom from outright destruction. The immunity of data to being discarded is, of course, enabled by the ever decreasing price of hardware, but Google’s intervention to render historical data available within a few seconds stands to fundamentally disrupt and transform the economics of cloud storage.

Categories: Amazon Web Services, Google

Amazon Zocalo Adds Sync Functionality For Shared Folders

On December 23, Amazon Zocalo announced an enhancement to its collaboration platform by providing customers with the ability to sync content within shared folders. Customers use the shared folder sync feature by setting up shared folders for designated projects and teams and subsequently enabling the synchronization of those folders for all requisite team members. Users can activate Zocalo’s sync functionality during the set up and registration process by checking the “Enable Shared Folder Sync” box or visiting “Preferences” and doing the same. Amazon’s latest enhancement of its Zocalo platform illustrates its seriousness in tackling the market for enterprise-grade collaboration, file sharing and cloud storage products. That said, Amazon has its work cut out for it if it really intends to disrupt the collaboration and storage space, particularly given that competitors such as Box, Dropbox and Huddle deliver products with advanced security functionality in addition to the ability to configure corporate teams and third parties as collaborative parties. Nevertheless, Zocalo represents a notable feather in Amazon’s cap as it continues to diversify its product suite while staying true to its larger vision of delivering fully managed cloud-based products and services.

Categories: Amazon Web Services

Amazon Restructures Reserved Instances Pricing, Reduces Fees On Outbound Data Transfer And Streamlines Data Transmission To Amazon Kinesis

On December 2, Amazon announced a change to its EC2 reserved instance pricing model. Reserved instances allow customers to reserve computing power for three years in contrast to the on-demand, pay as you go model of cloud computing. Reserving instances for a fixed duration entitles customers to deep discounts in comparison to hourly pricing. Previously, Amazon Web Services customers were required to pay up front, in full, for either one to three years of reserved instance usage. Last week, however, Amazon unveiled two additional pricing options for reserved instances marked by the choice to pay either a partial amount of the reserved fee up front or no up front costs at all. Customers who pay no up front costs benefit from the cash flow advantages specific to spreading out their payments over the duration of the reserved instances term. However, paying up front for a three year reserved instances term gives customers a 63% discount in comparison to on demand pricing over three years, whereas the no up front payment delivers lesser savings, on the order of 30%.

Amazon’s reduction of its reserved instances pricing was announced days before a price reduction on outbound data transfer fees ranging from 6% to 43%, depending on the region and the volume of data transferred each month. Meanwhile, Amazon also recently announced an API function, PutRecords, that streamlines the insertion of data into a stream of Amazon Kinesis data. The PutRecords function can transmit as much as 4.5 MB of data into an Amazon Kinesis stream by means of a function that sends a maximum of 500 records, each one as large as 50 KB, into a Kinesis stream via a single HTTP call. The bottom line is that Amazon continues to innovate and remain competitive amidst growing competition from Google Compute Platform and other IaaS vendors whose products, pricing models and partner ecosystems are increasingly maturing and posing more of a competitive threat to Amazon’s market share dominance in the IaaS space.

Categories: Amazon Web Services

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