CIOs can use the Cloud to become more strategic: Amazon Web Services

Amazon Web Services chief technology officer, Werner Vogels

When Amazon Web Services (AWS) chief technology officer, Werner Vogels, joined the organisation in 2004, the focus was very much on servicing customers in a retail environment. The concept of commercially available, robust, scalable infrastructure was just that — a concept.

The organisation was working big name retailers such as Marks & Spencer and Target but it was the online retailer’s own operations that drove the technology agenda. Amazon Web Services was really borne out of the business requirements of its retail operations.

“There was no commercial software that could service to the scale the organisation needed,” Vogels recalls. “So we worked to put more rigour into the fundamentals, looking at things like performance, availability and efficiency.”

Amazon quickly recognised a new business model, opening up its technology as e-commerce services. It quickly found a market with lean, fast-growing companies that needed scalable infrastructure.

“It took about two months for enterprise to realise this was a way to get a good deal,” Vogels says.

Fast forward to 2011 and AWS has become synonymous with Cloud computing. And, like any growth area, there have been growing pains. Vogels, however, maintains the organisation has lost none of the core ingredient of those early days — innovation.

These days AWS are used for all number of applications, be they Monte Carlo simulations and risk analysis in financial services, pharmaceuticals, marketing or development.

Vogels readily admits AWS is “still learning how to be more effective” as it expands from its original audience – developers within enterprise – to a more business-focused approach.

“It was clear that as we were becoming more mature we needed to provide services next to [APIs] in the form of user interfaces, support, training and so on. It goes beyond just serving the technology and I think we’ve reached a point where we have nurtured the ecosystem so that we can help businesses grow and help their customers.

The Cloud in Australia

Ask Vogels about Cloud adoption in Australia and he is quick to point out that Australian organisations have been with AWS from the beginning.

“99Designs was one of our earliest customers — they were on board in the pre-beta realms.”

He says usage patterns and adoption rates for Australia are similar to that around the globe; agile, fast-growing businesses look to the Cloud as an inexpensive way to get up and running while large enterprise takes a more strategic view.

“I was talking with a CIO in Australia the other day who explained he oversees about 4000 applications,” he says. “Obviously, not all of those 4000 go to the Cloud — they’re not all suitable. To determine that you need to do a deep-dive and CIOs are really looking at this as a two-tiered strategy.

“Right now, anything internet-facing is a no-brainer and marketing campaigns are a good example. To support that you need to overscale or use a Cloud service whose elasticity can serve the increase and also cap the overall cost.”

The second part of the strategy is the learning phase for engineers and staff, he says, not just for proof of concept projects, but for real-world programs. These days, it extends far beyond the development test environment to backup and other, more unexpected uses.

“I was surprised to learn how many organisations are moving their SharePoint cluster to the Cloud,” Vogels told CIO Australia. “And I was also surprised that another early service is HR. I thought it would be one of the last, but it turns out HR is highly seasonal and goes through phases as people undergo performance review and the like.”

In the longer term, CIOs are beginning to mandate new IT has to be Cloud ready. Outgoing US Government CIO, Vivek Kundra mandated a ‘Cloud first’ IT strategy, for example. CIOs are looking for solutions that are automatable and inherently secure.

“AWS offers a virtual private Cloud service that allows CIOs to cordon off part of the Cloud, assign their own address block and communicate back to the data centre,” Vogels says. “The data centre can breathe in and breathe out. It makes the migration of applications to the Cloud much easier.”

It can also make conversations with the CFO easier, as evidenced when the Danish government moved its invoice processing into the Cloud. Having estimated it would take two years to return the investment, AWS lowered prices twice during the development cycle. The result: A return on investment of two months.

“Hundreds of thousands of companies help us drive such combined economies of scale and we keep core to our customer-orientated retail roots and pass on those savings,” Vogels says.

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