Amazon’s cloud goes to Mars
March 24, 2012
Amazon’s cloud computing service is being used to operate Nasa robots on the surface of Mars, Netflix’s video streaming service and the Guardian’s dating website, as the retailer’s little-known IT business rapidly expands.
The six-year old cloud business remains overshadowed by Amazon’s vast online store, but clients and analysts say the company’s various cloud-computing services are replacing a growing number of in-house IT functions and dominate the sector.
“We continue to see equally rapid growth across all of our [cloud] services as we have in the past,” Adam Selipsky, vice-president of Amazon Web Services, told the Financial Times. The number of files in the Amazon cloud nearly tripled to 762bn last year…
Its investment in cloud computing underscores how far Amazon has diversified beyond its origins selling books, but AWS says it has replicated the business model of Amazon’s retail store by selling services in high volumes at lower prices and lower profit margins than traditional technology groups.
Amazon charges clients a pay-as-you-go fee for access to a flexible portion of cloud space where they can manage data and run their websites, making it easier to cope with demand spikes and reducing the need for in-house servers and technicians.
Nasa uses the service to operate two “robot geologists” prowling opposite sides of the red planet as part of its Mars Rover Exploration mission.
Netflix runs its entire video streaming operations from the Amazon cloud even as it competes against Amazon’s Instant Video service. Netflix said AWS does not have access to detailed information on how it operates and does not share information on cloud users with competing businesses at Amazon.
The Seattle-based retailer does not disclose financial information on its cloud business. But David Smith, analyst at Gartner, estimates that it has annual revenues of about $1bn and is far larger than the equivalent business of rivals, led by Rackspace.
This month Amazon cut its cloud prices for the 19th time, bringing the cost of running a small website on its services to $250 a year versus $876 in 2006.
However, in a move that highlights the limitations of the public cloud for some, Zynga, the social gaming group, last year shifted the bulk of its operations from the Amazon cloud to its own private cloud, which it said was better tailored to its needs.
The UK’s Guardian newspaper runs several services in the Amazon cloud, including its Soulmates dating website and its iPad app, but not its main online news pages.
Describing AWS as “stable, scaleable, secure and cost-effective”, the Guardian said: “They are our back office for those services.”
Airbnb, the private home rentals website, runs its entire service in the Amazon cloud and Nathan Blecharczyk, Airbnb’s co-founder, praised its low prices and provision of useful new software tools.
Last April AWS crashed in part of the US, knocking out scores of websites including Airbnb, which was down for a total of 30 minutes and had its search function disabled for three hours.
Mr Blecharczyk said: “This happens to all companies, but I think if we’d [run Airbnb’s IT functions] alone, or done it with someone else, we would have had more downtime.”
AWS’s Mr Selipsky said the company had taken several steps since then to ensure its systems were more robust and more reliable.
Rackspace estimates that only 15 per cent of IT functions have been outsourced to cloud services. Mr Selipsky said: “By far our biggest competitor remains the disc drive and the server; people not understanding yet what the cloud can do for their business; people being in some cases fearful.”