Amazon Web Services SVP defends why public clouds trump private models

SAN FRANCISCO — Businesses are moving to the cloud at a faster pace than ever before, and for a few select reasons, according to Andy Jassy, senior vice president of Amazon Web Services.

"There's a lot of noise about this point, and there are a lot of companies trying to commandeer this messaging for select purposes," said Jassy while speaking at the opening keynote of the AWS Summit on Tuesday morning.

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Jassy argued that there are a lot of "old guard technology" companies telling enterprises they can get the same benefits through private clouds and on-premise deployments.

"However, when you actually carefully look at the benefits of moving to the cloud, you realize the private cloud has none of them," Jassy remarked.

"However, when you actually carefully look at the benefits of moving to the cloud, you realize the private cloud has none of them," Jassy remarked. 

He followed up that the reason why these "old guard" companies are saying this is because they find the AWS cloud to be disruptive.

Going over what the AWS cloud is supposed to offer instead, Jassy posited it can offer a lower variable expense than companies could do themselves. Jassy cited that Foursquare cut analytics costs by 50 percent on AWS.

"If you could trade capital expense for variable expense, for most businesses, that's a big business advantage," Jassy commented.

Secondly, Jassy said customers don't need to guess capacity.

Another reason, which Jassy suggested might be the most compelling in regards to enterprise customers, is that the AWS infrastructure "dramatically" increases speed and agility. He translated this to something simpler: they can move much faster and get more done for less.

Highlighting a few more customer examples, Jassy said that the film studio Lionsgate went from "weeks to hours" with its cloud deployment while News international reduced application deployment from two months to three days.

The final two reasons that Jassy offered were being able to stop wasting money on "undifferentiated heavy lifting" and going global within minutes.

AWS has rolled out 71 new services and features launched so far in 2013. The Seattle corporation's global infrastructure now spans nine regions, 25 availability zones, and 39 edge locations.

Those cloud hotspots provide coverage for "hundreds of thousands" of customers across 190 countries, ranging from popular consumer brands such as Spotify and Instagram to the U.S. Department of State.

When there's a big technology shift, like moving to the cloud, if you have more fellow customers (either in your industry or geographically close to you), you're more comfortable following suit, Jassy suggested.

Jassy described that when AWS was being founded, there were "massive debates internally" about where Amazon should build the services, how much functionality to build in, and how many decisions to make on behalf of developers.

Jassy continued that the decision was to offer "building blocks" that developers can "stitch together however they see fit" to build whatever applications they needed — or could imagine.

To put into perspective how much AWS (and Amazon as a company overall) has grown, Jassy recalled that back in 2003, Amazon.com's retail business was worth $5.2 billion with 7,800 employees and "a whole lot of servers" on board.

By 2012, Jassy said that AWS adds enough server capacity to power this $5 billion operation each day.

"On the infrastructure side, if you're able to invent and innovate on your infrastructure, it allows us to lower costs, which lowers our prices, and then spins that wheel," Jassy concluded.

Just one piece of the larger cloud puzzle, Amazon S3 currently holds over two trillion total objects, with 1,100,000 peak requests per second.

Along with recapping the evolution of select services and accreditation on AWS, Jassy highlighted the AWS pricing philosophy in particular, remarking that Amazon's is "very clear and consistent" while "competitors want to charge as much as they can."

Acknowledging that's a "high-margin" and "reasonable business strategy," Jassy retorted that's not the case at AWS.

Boasting 31 price reductions since 2006, Jassy argued that this has given AWS a "virtuous" circle.

"On the infrastructure side, if you're able to invent and innovate on your infrastructure, it allows us to lower costs, which lowers our prices, and then spins that wheel," Jassy concluded.