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Oppenheimer analyst Tim Horan says Amazon’s cloud computing unit would be better off as a publicly traded subsidiary.

Horan expects AWS revenues to grow from an estimated $2.1 Billion in 2012 (up 77%) to $10 Billion by 2016.  Using Rackspace as a data point and extrapolating from there, Horan estimates that AWS could have a market cap of $101,000,000,000 by 2018.

The differences between customer base, channel, and market could not be more stark when comparing AWS and Amazon retail, but there has been little pressure to date to make any changes.  With an estimated market share of between 75-80% of cloud workloads running on AWS, there appears to be no pressing need to change.

However, we’re in the very early days of cloud computing with plenty of growth yet to come.  This will provide the environment for competition to build, and with that the pressure make the split.

Read more here.

Posted under cloud

Infrastructure-as-a-Service Breakdown

There’s an interesting post by Advanced Systems Group that provides the top-level costs they were able to derive from an internal study they did to compare public and private cloud implementations.  It’s the start of a good discussion (questions/comments I posted are still in moderation).

Their post compares three different cloud options from a cost perspective: 1) Public Cloud from Amazon EC2; 2) Purchased Private Cloud infrastructure; and 3) Leased private cloud infrastructure.

All three systems were based around the equivalent of (using AWS parlance) 10 Extra Large CPU instances, 60 Large CPU instances, and 30 Small CPU instances.

The cost calculations were run by ASG over 3 years assuming an increase of 15% in compute demand, and not accounting for depreciation.

When ASG noted in an answer to a comment that all instances are assumed to be running 24/7 my curiosity was piqued to drill in a little bit.  The problem is, solely comparing private and public based upon 100% utilization removes one of the most compelling reason for the cloud - a pay-as-you-use model.  It skews the conclusion from the start.  (How many data centers run at 100% utilization anyway?)

Also, from a rough calculation, we can see that their Amazon numbers appeared to be based upon the cost of On-Demand Instances.  24/7 utilization over a three year period is not a cost effective use model for the On-Demand pricing model.

Performing a straight hardware costs calculation, (I’m assuming that ASG were adding in some additional costs for storage and data transfers to get to their top line numbers, as I couldn’t get there from a simple calculation.  Their 3Yr cumulative cost for the Public Cloud scenario was slightly over $1M, where as mine below came in slightly under), I got the following top line numbers for an On-Demand instance scenario (the least economical).  For completeness, I also added in the two more sensible scenarios of either a rolling 1 Year Reserved Instance model or a one-time 3 Year Instance model.

Public vs Private Cloud Costs (100% Utilization)

And so, taking these basic calculations in isolation of all other considerations, we can see that from a purely hardware resource expenditure perspective, a Public Cloud implementation is roughly the same or even less than a private cloud implementation.

However, this is still only part of the story.  As mentioned, a key draw to public cloud computing is the elasticity of the model - Pay-as-you-Use.  And so, considering a selection of rough percentage utilizations, we get the following breakdown of the different hardware costs of a public cloud implementation.

AWS Public Cloud Costs: Time vs Model vs Utilization

The comparison relative to utilization becomes even more stark when charted.

Cloud Cost Comparison vs Percentage Utilization

Not only is AWS more economical over utilization rates over extended periods, but it provides flexibility.  For example, if the software used on the servers is upgraded (as is likely) and hardware requirements increase (equally likely, given history), moving an image (AMI) from a Small to a Large instance is straight forward (for an “IT guy”).  No hardware needs to be thrown out or shipped in.

Additionally, there is some flexibility around migrating across business models.  Of course, it is easier to upgrade than downgrade

Posted under cloud

We’re very excited to announce Xuropa’s entry into the Amazon Web Services (AWS) official Service Providers Directory.  We’re proud  to provide to our customers unique CRM and AWS provisioning and automation technology.

While the Xuropa Application is Cloud and Data Center agnostic, our preferred public cloud provider is Amazon.  Back in 2008, when we first started development on a public cloud solution to move away from dedicated co-location data centers, we reviewed pretty much every public cloud vendor on the market.  The flexibility, level of automation, and security made AWS stand head-and-shoulders above other vendors.

As our market continues to grow, we’re very happy to see Amazon’s product offering grow with us.

API

The sophistication of their API was the real deciding factor why we went with AWS from the beginning.  If server instances cannot be started and stopped via a command API, then your cloud provider is missing a key part of “the point” of cloud computing.  This has been available from AWS from the start.

Security

It was clear from the beginning that AWS hold security as high a priority as we do.  Not only do they offer state-of-the-art physical and logical protection, they do not compromise usability or automation.  Practical and secure - a pragmatists approach to the cloud.

Performance

The Xuropa Platform hosts some of the most demanding applications on the planet.  Not only do we need the highest available performance machines today, but our customers continue to push the boundaries in terms of CPU and memory requirements.

AWS promisese to catch up and keep pace with our most demanding customers.

Global Footprint

Our customers are using the Xuropa Application to penetrate and serve global markets, and to deliver the lowest latency performance possible means that we need to be able to instantiate servers within those regions served.  AWS provides this facility unlike any other.

We look forward to a very fruitful partnership between our two companies, and are happy to contribute our unique products and services to the Amazon Web Services ecosystem.

Are you using the Cloud?

We’d like to discuss your move to a cloud delivery model.  Our application enables a step-by-step approach as you migrate your products and your business to the next paradigm in computing architectures.

Software-as-a-Service Delivery

The Xuropa Platform was architected from the ground up to support cloud deployment and monetization.  It may be early days for your particular industry, but we’ve been in this space for three years already - and we’re ready to support you in the migration of your business.  Drop us a line at saas_at_xuropa_dot_com to discuss.

Online Evaluations

Using the Xuropa Platform, you can easily allocate to your prospects cloud computing resources hosting your software for a day, a week, a month, or for however long your customer needs.  The system removes all need for IT resources and your customers don’t need to worry about downloading and installing software.  Your prospects securely upload their data into the cloud and use your software to perform realistic yet hassle-free evaluations.  The platform is secure, and you monitor all activity so you can see the progress your customer makes in the evaluation process.

Hands-on Demonstrations

The Xuropa Platform, with its integrated Social CRM system, enables you to easily reach out to your market via online social and professional platforms such as LinkedIn, Twitter, and Facebook.  From just the click of a link, your prospects are brought into a secure collaboration area from where they can connect to your dedicated cloud servers hosting your software to start kicking the tires and educating themselves on your differentiating features and value proposition.

Hands-on Training and Workshops

Pre-sales or post-sales, training and workshops are a valuable tool in moving a sale forward and getting new customers up to speed on your software.  They are traditionally very expensive propositions usually involving shipping out hardware and technical experts for setup and delivery of the material.  Take all of the hassle and the cost of logistics out of the process by delivering your material from the cloud via the Xuropa Platform.  You’ll save money and the valuable time of your subject matter experts.  Your customers will also appreciate the ability to take classes from their own desk and revisit material later for a quick refresher - all with no downloads, no installation, and no license keys to worry about.

Let us know how we can help your company leverage Amazon Web Services in the comments below.  Or drop us a line at saas_at_xuropa_dot_com.

- James

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Posted under Sales Automation, cloud