Amazon: Private cloud not 'real' cloud offering

update Current model of private cloud lacks all advantages of what cloud computing should offer and companies need to think twice before investing in these projects, caution Web Services exec.
Written by Kevin Kwang, Contributor

update SINGAPORE--The current private cloud model that requires companies to invest heavily in virtualization and maintaining their own data centers is not a "real cloud" model, according to an Amazon executive.

Andy Jassy, senior vice president of Amazon Web Services (AWS), argued that the current model of private clouds does not provide the capital expenditure (capex) savings and scalability of a true cloud offering. AWS is a subsidiary of Amazon.com.

"Companies usually are not able to provision accurately the amount of data center capacity that they require, and this problem recurs when they create their own internal cloud infrastructure," said Jassy, who was in town Thursday for the Infocomm Development Authority (IDA) Distinguished Infocomm Speaker Series.

He noted that companies would still have to dedicate a proportion of their IT resources, such as software engineers, to maintain the data centers instead of freeing them up to create products that will differentiate their companies from the competition.

This runs counter to the definition of cloud computing, which Jassy said constitutes five attributes: changing capex to variable operational costs; a pay-as-you-go payment model; allowing companies to have truly elastic, scalable data center capacity, fast product time-to-market; and reducing the focus on hardware management. These attributes are in accordance to Gartner's definition of cloud computing, he said.

Speaking to ZDNet Asia in an interview after his address, the Amazon executive also questioned the role of IT vendors that have taken to repackaging existing technologies to include a modicum of cloud-like features and selling these off to customers as "cloud" products. This is particularly true for private cloud vendors with their supposed cloud offerings, which Jassy said "confuses" him.

"If you look deep into what [private cloud vendors] are offering, you will see that it's basically an internal data center that is virtualized and has some management tools. Organizations that have private cloud systems will have missed out on all the advantages and benefits of going into the cloud," he noted.

He said it is questionable that these IT vendors, many of which have been used to gleaning off high volumes from their products, are suddenly stepping up to offer a "high volume and low margin" product that will not benefit their revenues.

"The question companies have to ask is this: 'Would these IT vendors want to give up 80 percent of their gross margins to offer a high volume, low margin offering for businesses?'," he said, noting that Amazon has been playing in this high volume-low margin field from the beginning when it started its online retail business.

Asked why then did it launch its Virtual Private Cloud service (VPC), released as a public beta test late last year, since public cloud is the way to go, Jassy said this service is targeted at companies that already have their own data centers and want their facilities to emulate AWS' data center.

Companies that have invested in security and management tools can also link up directly with AWS via Amazon's virtual private network (VPN) without having to replace legacy applications, he added.

Amazon Web Services finally in Asia
Jassy took the opportunity today to announce the launch of its Singapore-based AWS Asia-Pacific Region data center, which he said would eliminate the latency and data location issues most customers in the region were concerned about.

"Now customers in the region will be able to store and move their data with the same latency as what our customers experience between the East and West coasts of the U.S.," he noted. Services such as its Elastic Compute Cloud and Simple Storage Service are now available to customers, he added.

According to Jassy, the data center was built in response to numerous requests from business communities in the region as well as multinational companies that have a stake in Asia.

"One of the most frequent and resounding requests over the last year has been for AWS to launch an Asia-Pacific presence," he said. "We've heard them and we have moved as fast as we can to bring our services and data centers over to this part of the world."

Amazon first unveiled plans for the Singapore facility last November when it said it would expand its cloud services to the Asia-Pacific region, which would include a new cloud infrastructure here.

The Singapore data center, which is Amazon's first in the region, is an addition to similar centers already established in the U.S. and Europe. He added that the company is looking to increase the number of such facilities in other parts of the region "over the next few years".

Jassy said: "The main constraint we have now is time as there are only 24 hours in a day, but we're moving rapidly to expand our business." Other hurdles include "robustness of infrastructure, [Internet] connectivity and costs", he added.

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