Amazon Web Services Summit Amsterdam 2013

AWSAmsterdam2013logo

Last week I visit the Amazon Web Services Summit that came to Amsterdam for the first time.

The kick off of this event was made by the CTO of Amazon, Werner Vogel, with a keynoteAWSAmsterdam2013 introduction. He gave a short summary of Amazons success story of seven years young. Boasting on 34 price reductions since 2006 and the delivery of 33 services to 100000 customers in 190 countries. All based based on the circle of More AWS Usage -> More Infrastructure -> Economies of Scale -> Lower Infrastructure Costs -> Reduced Prices -> More Customers -> More AWS Usage -> and so on.

He explained that in economic terms cloud computing is offering:

  1. Elasticity; by dynamic (on-demand) provisioning of IT resources to customers, without customers having to worry for peak loads.
  2. Economy of scale; with multi-tenancy sharing of resources and costs across a large pool of customers by means of centralization of infrastructure and improve utilization and efficiency.
  3. Shorter time to market; reduction in the average time to create and deploy a new solution from weeks to minutes
  4. Different cost structure; trade capital expense for variable expense thus pricing based on real consumption (utility computing).
  5. Increase Innovation; increase the number of experiments because the very low costs of failure.

This cloud computing promise was proved with several examples from different industries.  It was very nice to see that these cloud computing features were the leading theme of the summit. Also the other presenters, a combination of Amazon Solution Architects and AWS Customer representatives, gave proof about these features without going in too much technical details.

Although the presentations were convincing the promise of massive cost savings combined with increased IT agility are based on the assumption of:

  • Improved IT interoperability and portability.
  • Delivering IT commodity services.
  • A competitive and transparent cost model on a pay-per-use basis.
  • And the quiet assumption that the service provider act on behalf and in the interest of the customer.

But are these assumptions always met? In general companies, especially larger enterprises and not start-ups, should check these assumptions when they want to outsource their infrastructure to cloud computing vendors.  Horizontal, Vertical, Inclined or Generational lock-in are lying in wait.

Steve Diamond [1], chair of the IEEE Cloud Computing Initiative, stated that “Cloud computing today is very much akin to the nascent Internet – a disruptive technology and business model that is primed for explosive growth and rapid transformation.“ However, he warns that “without a flexible, common framework for interoperability, innovation could become stifled, leaving us with a siloed ecosystem.”

Nevertheless Amazon was very persuading to live up to their promise.

Interested in reading more on sourcing issues? Take a look at the book Right Sourcing: Enabling collaboration  or the web site www.sourcing-it.org.

[1] IEEE, 2011,IEEE launches pioneering cloud computing initiative,

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