Zynga Opts To Close Datacenters And Revert To Use Of Amazon Web Services

After beginning its startup trajectory by leveraging Amazon Web Services and then subsequently reverting away from AWS in favor of internally managed datacenters, Zynga is reverting to AWS again. Zynga CEO Mark Pincus explained the decision to re-contract with AWS last Wednesday by noting, “There’s a lot of places that are not strategic for us to have scale and we think not appropriate, like running our own data centers. We’re going to let Amazon do that.” As reported in The Wall Street Journal, Zynga’s decision to shut down its internal data centers represents part of a larger initiative to cut costs by $100M, including an 18% cut in its workforce by the end of the year. Amazon’s price reductions over the last year render it more affordable than ever and underscores the value proposition of cloud computing vendors that can deliver on demand, pay for use computing that can morph in conjunction with the changing needs of its customers. Moreover, the larger operational agility of the cloud will enhance the ability of Zynga to continue tweaking its business model as it aims to restore confidence amongst investors after failing to deliver on the much hyped promise of its 2011 IPO.

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