Today in Cloud

Amazon has opened a new “U.S. West” data center in Oregon. Derrick Harris notes that the company is delivering this to users 10% cheaper than the existing west-coast facility in California. These prices are the same as the U.S. East facility in Virginia, and significantly below the rates charged to users in Europe and Asia. Rich Miller has more on the modular approach Amazon has used in building this data center. It’s not clear how much the design contributes to the lower cost, and how much this is down to cheaper power/cooling/real estate in Oregon.

Today in Cloud

GigaOM Pro’s latest quarterly wrap-up is out, and Derrick picks the growth of OpenStack and the continued march of Flash storage as his hot new trends for the quarter. Take a look back on everything that’s happened in the past quarter, and reflect on where it leads us in the last few months of the year…

Today in Cloud

Derrick Harris reports that life is getting easier for Facebook developers, with a new arrangement seeing Heroku offered as a simple means of hosting and delivering new applications to users of the social network. Heroku, which was acquired by Salesforce last December, offers a Platform as a Service (PaaS) product that supports developers writing in languages such as Ruby and Java. Under the agreement with Facebook, developers will be able to host new applications with Heroku, and deploy them in Facebook with a click. With competition hotting up in the PaaS sector, high profile relationships such as this one should do Heroku a lot of good.

Today in Cloud

As Platfora, yet another Hadoop-powered startup, secures $5.7million from Andreessen-Horowitz, Bloomberg BusinessWeek offers the CEO Guide to Hadoop. The BusinessWeek articles illustrate some of the ways that companies from Wal-Mart to IBM are benefiting from big data, and provide some of the language that executives will need before they turn up in the data center and demand “a Hadoop.” Platfora’s release, on the other hand, suggests that big data technologies aren’t necessarily ready to be let loose on the wider world. Derrick Harris remarked that “It all sounds great on paper, but there is at least one catch to Platfora: Customers will still have to employ at least a few Hadoop-savvy folks to manage their Hadoop clusters.” Also discussing Platfora, Jeff Kelly noted that “Hadoop is still an immature and rapidly developing software framework and I think an iterative approach towards Big Data analytics is the more prudent model.” For most, the promise of big data insight with Excel-like simplicity is still a long way from being true. The benefits are there for the taking, but a lot of this stuff remains hard to get running.

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Hewlett Packard today announced a closed beta of HP Cloud Services; the company’s attempt to compete at scale with Amazon’s market dominating Infrastructure as a Service (IaaS) offering. HP is claiming “integration of OpenStack,” but GigaOM’s Derrick Harris is amongst those questioning the extent to which HP’s new baby is relying upon the open source code. One of OpenStack’s promises was interoperability; the ability to move from a Rackspace cloud to a Dell cloud to an HP cloud, all powered by the same codebase. If — as appears the case here — HP has tweaked and fiddled, and built dependencies to their own hardware and software, that interoperability will be very limited. Derrick concludes, “when beta users start talking and when HP opens the doors on its cloud services to the public, then we’ll see how HP really stacks up as a cloud computing provider.” Indeed.

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Earlier this month, Derrick Harris wrote about the current fashion for taking open source software and shipping it alongside some bespoke hardware in the form of an appliance; buy it, plug it into the network, and just let it get on with the job. As Derrick argued, there are plenty of reasons why this might make sense as an approach to sustainable growth. There are also plenty of reasons why it doesn’t, and the investment, margins and skills are very different to those associated with shipping code or delivering professional services. Nevertheless, the trend continues, with Nutanix today announcing a virtualized server with on-board solid state and hard drive storage. Appliances are an interesting approach, perhaps most applicable in circumstances where a customer really does intend to simply buy one and sit it in the corner to get on with its job. Things can become more complex when appliances need to be tightly integrated with other infrastructure, but then that’s often also true when integrating traditional hardware from different vendors. Where will the current enthusiasm for appliances take us next?

Amazon makes public cloud more attractive to the enterprise

On Thursday Amazon announced three enhancements to its cloud computing offering. These include improvements to existing virtual private cloud and identity management solutions as well as a new option to directly connect enterprise networks to machines in Amazon’s Virginia data center, as Derrick Harris recounts and Amazon’s Jeff Barr details. By enhancing existing solutions such as its Virtual Private Cloud (VPC) and beginning to offer new capabilities in the form of Direct Connect, the company is continuing the gradual process of expanding, extending and enriching the Amazon Web Services proposition. But can the new AWS features give CIOs more of a reason to place their faith in Amazon and, in general, the public cloud?

Amazon is far from alone in seeking enterprise customers, and it needs to work hard to attract CIOs used to dedicated networks and physically secured racks of servers located in its own data centers or in carefully vetted co-location facilities.
The expansion of VPC sees Amazon offer its secure virtual networking capability in Amazon data centers outside the U.S. for the first time, enabling customers to securely move data between Amazon’s cloud and their own data centers, similar to VPN techniques. The enterprise gains access to Amazon file storage and Amazon computing resources without undermining the security of its existing network.

But more important is the new Direct Connect. Enterprise IT is used to dealing with IBM, HP, Microsoft and others. A degree of trust already exists, expectations are already managed and in many cases the enterprise may already be using an IBM or HP data center for co-location, disaster recovery or hosting. As these established providers of IT services extend their cloud ambitions, they are increasingly going to compete with Amazon for the attention of the same executives.

In these negotiations, the availability of traditional data centers, or the ability to connect securely and rapidly to existing IT assets, will play a role. In those situations where the customer needs or wants direct connections from cloud-based resources to infrastructure elsewhere, Direct Connect gives Amazon the means to match competitors with its own hosting and co-location solutions. A direct connection between Amazon’s cloud and equipment in an Equinix data center should be as capable of meeting most enterprise technical requirements for a hybrid solution as a combination of hosting and cloud from enterprise competitors such as HP.

It remains to be seen whether Amazon and Equinix can compete on price, especially as Amazon’s existing fixed-price model may be less amenable to negotiation and discounting than established enterprise providers’. Also, it’s worth noting that Thursday’s announcement is limited to customers with jobs running in Amazon’s US-EAST region and equipment in Equinix data centers in Virginia. But in the coming months Amazon plans to extend the reach of Direct Connect to San Jose, Los Angeles, London, Tokyo and Singapore, as well as to data center providers besides Equinix.

Direct Connect is not, by itself, the feature to send enterprise CIOs rushing to embrace Amazon Web Services. Nor are a VPN or some rudimentary access management controls. That’s not the point. Amazon doesn’t tend to release hugely compelling features very often. Instead, it increments gradually. It launches something, rolls it out to other geographies, then adds a few more features that we might have expected from the outset. It gradually improves, gradually attracting users and increasing the pressure on competitors.

Amazon didn’t change the world this week. But it certainly did remove some of the excuses that an enterprise CIO might use to avoid trusting Amazon’s public cloud. Next month, it will remove a few more. Amazon will continue to undermine objections to enterprise use of its cloud, and competitors will try to follow. In other words, the public cloud wins, and so does the customer.

Question of the week

Will the enterprise embrace AWS and the public cloud now that Amazon has enhanced its offering?

Today in Cloud

Amazon is due to report quarterly earnings today, and Reuters took the opportunity to speculate that the company’s cloud computing division will soon pass $1Billion in revenue. Amazon, however, is notoriously unwilling to discuss financials for the business unit. We may know that 449 billion objects are stored in Amazon S3, and we may project Amazon’s marketshare as the largest, but when it comes to understanding the margins that the company achieves we’re typically left guessing. Maybe Amazon will surprise us later today, and finally lift the veil a little.