AWS Re:Invent: AWS blasts private cloud pushing tech dinosaurs

News Caroline Donnelly Nov 28, 2012

Cloud services giant's senior vice president lambasts "old guard" tech firms for pushing private cloud on customers

Amazon Web Services (AWS) has used the opening keynote of its Re:Invent customer and partner conference to launch a verbal assault on its private cloud pushing rivals.

During the keynote presentation, the company’s senior vice president, Andy Jassy, talked delegates through the success the company has enjoyed during its six and a half years in business.

For instance, he claims the company now has “hundreds of thousands of customers” in more than 190 countries, spanning start-ups, such as social networking site Pinterest, to household names, including NASA, film distribution firm Lionsgate and Netflix.  

This level of acceptance has been achieved despite the best efforts of the company’s detractors, Jassy claimed, who previously wrote AWS’s cloud services off, declaring no one would build their business on them.

“When we launched AWS six and half years ago, developers were really excited and started using the services immediately in large numbers, but lots of people in the industry looked at it and said, that’s kinda interesting but I don’t think anyone’s going to use it for anything real,” said Jassy.

“Then we started to see startups building their businesses all-in from scratch on top of AWS and people said, well that’s nice but enterprises won’t use AWS...and never for mission critical apps.

“Now enterprises are using it for mission critical apps and the question isn’t if (they will), but of how fast (their )apps are moving and which ones will move first,” he added.

He also hit out at private cloud-pushing tech vendors, and “cloud washing” companies who have tried to fool customers by simply adding the word cloud to their existing product lines.

“When we launched AWS and cloud started to get some traction, we used to hear old guard technology companies (saying) – there is nothing new here. This is just virtualisation. There is nothing new in the cloud,” he explained.

“And as customers saw through that and realised that what AWS provides is a combination of software, hardware and datacentre as a service, the old guard started abandoning that reasoning... (and said) you can get all of the benefits of AWS in a private cloud.”

The latter point was something Jassy went on to challenge by claiming private cloud users rarely enjoy the same benefits as their public cloud using counterparts.

“You don’t get any elasticity (with private cloud), you don’t get that innovation cycle, you still have to manage it and you can’t go global in minutes,” he stressed.

Jassy claimed the reason why so many “old guard” technology firms are pushing private cloud is to protect their high margin business models.

“The economics of what we’re doing are extremely disruptive for old guard tech companies, which have lived on 60-70 per cent gross margins for many, many years,” he said.

“Now, high margin businesses have been around forever and they are obviously valid and successful business models, but...(ours) is a high volume, low margin model.

“Every business we run (fits that model)and most of the old guard don’t like those types of business, which is why they’re pushing private cloud because it doesn’t disrupt their businesses,” he added.