{"id":23684,"date":"2016-07-08T10:40:14","date_gmt":"2016-07-08T10:40:14","guid":{"rendered":"http:\/\/www.businesscloudnews.com\/?p=257232"},"modified":"2016-07-08T10:40:14","modified_gmt":"2016-07-08T10:40:14","slug":"the-cloud-is-a-utility-and-were-fine-with-that-aws","status":"publish","type":"post","link":"https:\/\/icloud.pe\/blog\/the-cloud-is-a-utility-and-were-fine-with-that-aws\/","title":{"rendered":"The cloud is a utility, and we\u2019re fine with that \u2013 AWS"},"content":{"rendered":"

\"amazon<\/a>While the telco industry is fighting to avoid being relegated to the likes of utilities, AWS has already accepted cloud computing is commoditised, reports Telecoms.com<\/a>.<\/p>\n

As cloud as a concept continues to become normalized within the business world, the number of competitors is growing day by day. AWS would generally still be considered the leader in the market, though progress from Microsoft and Google, as well as a number of new players appearing has slightly eroded this dominant position. According to Brendan Bouffler, AWS\u2019 lead for the team responsible for developing the scientific computing segment, the prospect of cloud becoming utilized would not bother the market leader.<\/p>\n

\u201cIt already is,\u201d said Bouffler. \u201cYou can move in and out of our cloud whenever you like. There\u2019s no long term commitment as our standard terms and conditions last for an hour. You can sign up for an hour and then move out. We see it all the time. We\u2019re constantly holding our feet to the fire and forcing ourselves to innovate, that\u2019s how we keep customers.\u201d<\/p>\n

Within the telco industry, operators are fighting against the tide to prevent the business being classed in the same bracket as utilities. Competing on price and constantly attempting to undercut challengers is not a battle ground the industry wants to operate in. The telcos would like to compete on value adds and brand equity, though Bouffler believes there is enough untapped business in the cloud market for the utility model to be successful.<\/p>\n

Estimates on the value of the global cloud computing market vary, though statista<\/a> believes it is worth in the region of $114 billion this year. Should AWS continue its healthy start to 2016, it will account for $10 billion. By 2020 the market is predicted to grow to roughly $159 billion, offering plenty of opportunity for competitors to establish themselves, and AWS to continue its growth.<\/p>\n

\u201cRunning a company like a hardware vendor does where they are looking for high margins is a legitimate business model, but ours is different to that,\u201d said Bouffler. \u201cWe\u2019re a high volume, low margin business and it\u2019s successful for us. It was pretty successful in disrupting the retail industry in the way books were sold. As a consumer of books, I\u2019m in awe of that. You can put books in the hands of people for almost pennies. We democratized reading and we\u2019re going to do the same for cloud.\u201d<\/p>\n

Bouffler believes the disruptive nature of Amazon and AWS is fuelling future growth within the business itself. Competing on price is not a worry for the team, as this was the origins of the Amazon book business. Amazon was launched in 1994 and shook up the retail book industry. It drove down prices, opened up new distribution channels and created an entirely new way of consuming literature. Bouffler believes the same is being done for computing.<\/p>\n

Although the telco industry is concerned with the direction it is heading, the potential for growth within the cloud computing industry means being classed as a utility is not necessarily a terrible fate for AWS. While there are some organizations who would like to create an industry with higher margins, Bouffler believes the origins of Amazon, the disruptive nature of the business and the experience of operating in a low margin\/high volume environment puts the company in a strong position to compete and succeed in a utility environment.<\/p>\n

\u201cThis is only the tip of the iceberg,\u201d said Bouffler. \u201cSome of our customers are people doing something they wouldn\u2019t have usually done without cloud computing. It wasn\u2019t that they were substituting for money which would have been spent on a hardware cluster, these are projects that weren\u2019t going to happen. This is net new stuff. This whole net new universe is still in front of us, I think we\u2019re only just scratching the surface.<\/p>\n

\u201cIt\u2019s incredibly sustainable. Even though we\u2019re a low margin business and a high volume business we\u2019re good with that. We\u2019ve been doing this since Amazon came into business (22 years ago), and the model is still working. I think there is still tons to be done before anyone writes obituaries about that business model.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"

While the telco industry is fighting to avoid being relegated to the likes of utilities, AWS has already accepted cloud computing is commoditised.<\/p>\n","protected":false},"author":203,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[57,4400,1976,524,4401],"tags":[18],"class_list":["post-23684","post","type-post","status-publish","format-standard","hentry","category-aws","category-competition","category-news-analysis","category-public-cloud","category-utility","tag-cloud"],"_links":{"self":[{"href":"https:\/\/icloud.pe\/blog\/wp-json\/wp\/v2\/posts\/23684","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/icloud.pe\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/icloud.pe\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/icloud.pe\/blog\/wp-json\/wp\/v2\/users\/203"}],"replies":[{"embeddable":true,"href":"https:\/\/icloud.pe\/blog\/wp-json\/wp\/v2\/comments?post=23684"}],"version-history":[{"count":1,"href":"https:\/\/icloud.pe\/blog\/wp-json\/wp\/v2\/posts\/23684\/revisions"}],"predecessor-version":[{"id":23685,"href":"https:\/\/icloud.pe\/blog\/wp-json\/wp\/v2\/posts\/23684\/revisions\/23685"}],"wp:attachment":[{"href":"https:\/\/icloud.pe\/blog\/wp-json\/wp\/v2\/media?parent=23684"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/icloud.pe\/blog\/wp-json\/wp\/v2\/categories?post=23684"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/icloud.pe\/blog\/wp-json\/wp\/v2\/tags?post=23684"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}