
How Amazon took control of the cloud - ingve
http://www.theguardian.com/commentisfree/2015/nov/01/how-amazon-took-control-of-the-cloud-john-naughton
======
mschuster91
Move to the cloud, all fine and everything, as long as you're an US company.

Can't speak too detailed because of NDA, but at work we cannot use innovative
tools like Google Docs, Google Mail for Business, Dropbox, Office 365 and the
likes (and for our privacy-conscious clients, no AWS, only Azure) because the
US government can compel the providers to turn over our confidential data to
them. We're stuck with Lotus Notes 8.5 and Office 2013 because our IT wants to
migrate to Office, but our client NDAs prohibit us from using cloud stuff with
their data (again, fears of the clients of US industrial espionage. Snowden
actually proved them right).

The NSA and the US government effectively killed their cloud business for non
US customers with their spying crap.

~~~
dogma1138
That's more likely to do with the cloud in general or even more likely with
platform specific compliance issues rather than anything to do with the US.

EU's data protection directive and various local legislation like the DPA
don't have an issue with the cloud, but are quite stringent on the fact that
the data doesn't leave the EU so you are restricted to EU data centers.

Google and Microsoft have services for EU customers that more or less ensure
that the data never leaves an EU data center (MSFT guarantees it, google
slightly less so) and as far as infrastructure goes most if not all PAAS/IAAS
providers have a European data centers. [https://aws.amazon.com/compliance/eu-
data-protection/](https://aws.amazon.com/compliance/eu-data-protection/)

I know for a fact that at the least British, German, Dutch and Italian
companies and governmental organizations even in heavily regulated industries
like health care and defense use both Azure and AWS for both corporate IT and
production (and if we count less regulated verticals such as banking,
financial services, and telco then everyone and their mother within the EU
uses Azure, AWS, and many other cloud platforms).

So no while there is some issues with some US companies and services in
regards to privacy especially around the safe harbor rulings there isn't any
global or even meaningful resistance to the use of US services providers and
software.

P.S. Also the fact that you use Lotus Notes and Office 2013 also has very
little to do with US phobia, you could've used Exchange just as well, and
office 2015 just came out and very few organizations have actually migrated to
it.

P.S. 2 You've likely already broken your NDA by admitting you signed one or
that one exists, as the existence of an NDA is the first thing that is by it.
Not to mention that while you didn't gave any technical detail the fact that
you've mentioned the restrictions your company and or organization is under is
also most likely a breach of any potential NDA as well as organizational opsec
protocols.

~~~
bad_user
That hasn't been my experience, I don't know from where you're getting your
facts from. But I'm involved with two very big German companies and I've heard
of many others that are banning US-based services and it's not enough for
those services to have servers in the EU. There is no such thing as AWS or
Azure, their usage would be unthinkable. Everything happens on their own
infrastructure and installing Skype on your computer for example can get you
fired. The reason is quite simply fear of industrial espionage and the Snowden
leaks made things a lot worse.

~~~
dogma1138
From actually doing security and compliance(ISO, PCI, FCA) related work within
the EU, as for getting fired for installing Skype, you can get fired for
installing any unauthorized software in a company with a strict computer use
and computer security policy.

I use skype to communicate with German clients including in the banking sector
like ING-DiBa, so anecdotal evidence aside not every company has some aversion
from US companies not to mention that Amazon is pretty much handing out free
AWS credits in every large accelerator in Europe (If you want anecdotal German
examples then Deutsche Bank's innovation hub in Berlin) including fin-tech and
health care specific accelerators and the participants are eating them up (and
if you want bigger companies than AWS's case studies have quite a few of big
German clients [https://aws.amazon.com/de/solutions/case-
studies/all/](https://aws.amazon.com/de/solutions/case-studies/all/) including
Siemens health care solutions and Software AG, and Nuremberg's Airport so 2
regulated industries, and the 2nd largest German software house). With the
exception of 1 startup in the current Barclay's accelerator run in London
every company in IIRC is running on AWS because of that, heck some companies
in the the MSFT accelerator across the hall are using AWS even tho that Azure
is pretty much complementary.

Big companies always are slow in adapting new technologies but it doesn't mean
that there is some generic no cloud or non US policy in it, yes if you are
handling data protected under local and EU data directives you need assurances
but if you can achieve those or flex them enough to maintain compliance you
will be able to use them.

Yes if you are giant org that has it's own data centers and 100% control over
all of it's assets you won't be jumping on the cloud bandwagon and you are
more likely to deploy a "private cloud" in house which is just a fancy word to
say that you will have more modern resource management and deployment
infrastructure, and sure the likes of Rackspace are still considerably more
popular in Europe (as they are in the US) than AWS as far as managed services
go mostly because they've existed for much longer and they still offer
traditional types of managed infrastructure / data center as well as cloud-ish
products.

You are also way way over estimating the impact of the Snowden leaks on the
industry.

~~~
evook
When avoiding US Services it's not about the whole company. At least 4 DAX
companies research departments I know about enforce GPG Crypted mail transport
since Snowden. Everything else bounces. The same companies asked us to exclude
the US and the UK out of sensible data routes. I know that's not gonna do it,
and there's a lot more to do but... I know that you know why I can't go into
further details.

~~~
dogma1138
Research departments have always had different operational procedures, 4-5
years ago i did a project for a company called Interhyp(financial services
mostly finance management loans and mortgages) in the building across them
there was a Siemens facility which had cell jammers that leaked through the
street if you were too close well tough luck.

Different departments and subsidiaries will operate according to different
procedures based on the specific threats and requirements, this happens even
in already highly regulated and restricted fields for example Lockheed
Martin'a Skunk Works and Boeing's Phantom Works operate on a completely
different level than their civilian and even military BAU aerospace
departments when it comes to operational security and secrecy.

Not every company, and not every department can and has to operate using the
same ruleset, departments that are relatively sensitive or can afford to work
under stringent rules may do so, departments that can't or don't really need
too won't, life isn't binary there's more than 2 ways to skin a cat ;)

~~~
mschuster91
Cell jammers? Shit these are illegal no matter where you want them...

~~~
dogma1138
Depends where and for what use, some company in the US got hit in the rear
because of that, but if you are working in the defense industry you might get
exempted, heck in South Africa there was a scandal this year when they jammed
the signal inside the parliament even tho it was illegal.
[http://www.news24.com/SouthAfrica/Politics/Reports-of-a-
cell...](http://www.news24.com/SouthAfrica/Politics/Reports-of-a-cellphone-
jammer-in-Parliament-20150212)

------
obulpathi
I have about 5 years experience with both AWS and Google Cloud (App Engine,
Google Compute, ..). I agree that AWS has more services to offer than Google.
Initially Google took the route of the App Engine and fell behind AWS.
However, recently its Compute Engine and other related services like Container
Engine, Datalab (IPython, Jupyter as a Service), Big Query, Dataproc, Pub/Sub
and more started outshining their AWS counterparts. Google's network is way
faster than AWS. AWS network is too slow and flaky. For anyone taking the
route of microservies, Google Cloud offers a huge advantage. Google new cloud
console (which is still in beta) is sleek and sexy. Google's cloud services
are a pleasure to use compared to AWS (other than a few pain points). I
recommend small and medium Cloud-based shops to relook into Google Compute
again. Google Cloud is adding services to its arsenal at a super fast rate
(much faster than AWS). Just take a look at their engineering blog:
[http://googlecloudplatform.blogspot.com/](http://googlecloudplatform.blogspot.com/).
In a year I see google Cloud overtake AWS in terms of the capability.

~~~
eknkc
Have been running a behemoth of a web application on AWS for 3 years on
multiple regions, using ec2, s3, elastic beanstalk, elastic transcoder, sqs,
dynamodb, cloudfront and rds. Have been pretty happy with both performance and
cost effectiveness.

That said. I have deployed some newer / smaller stuff on Google Container
Engine. Used Cloud SQL and Storage services along with it. I think Google has
a solid offering right now. Performance is great and tooling / management
interfaces are, IMHO, better than AWS's. I think it has a bright future as
well.

------
frostmatthew
> It now has annual revenues in the $8bn range, which is bigger than Amazon’s
> entire retail operation

If Amazon's total revenue (for 2014) was just shy of $90B[1] how can $8B be
more than their retail operation?

[1]
[https://finance.yahoo.com/q/is?s=AMZN+Income+Statement&annua...](https://finance.yahoo.com/q/is?s=AMZN+Income+Statement&annual)

~~~
boundlessdreamz
I remember reading that "operating income" of AWS is greater than the retail
arm

~~~
adventured
In the most recent quarter it essentially matched the retail side of Amazon's
_North America_ business on operating income.

In North America Amazon generated $528m in operating income. AWS generated
$521m.

AWS is growing extremely fast of course (78% sales growth year over year for
the quarter). In three years it'll probably be spitting off $4 to $5 billion
per year in operating income.

------
skywhopper
Amazing, but not surprising, that AWS is overtaking the retail operation in
terms of profit and growth. For all the minor frustrations involved in running
a big operation on AWS (good luck actually provisioning 1000 instances of a
single type on a whim during peak hours), the service itself is nothing short
of miraculous to someone who ran physical server farms a mere decade ago.

All that said, of course, Amazon's dominance will become a problem if no other
competitors find a way to seriously compete. Certainly their newer services
are designed to foster lock-in as much as they are made to provide simpler
architectures and automated resource management.

But I sincerely hope one of the smaller players grows into a real contender as
well. Amazon, at least at first, seemed like a disinterested player making a
hedge bet. Their customers were not competitors. With Google and Microsoft the
same can't be said.

~~~
optionalparens
Any players are good that encourage Amazon to do a better job. I really think
AWS improved since Azure and GCE came along. Moreover, when I dealt with
Amazon on calls and in meetings, any time we mentioned the Google or Azure
words, they immediately wanted to proactively respond (and eventually did). We
were a customer of both their competitors so this helped, but I give Amazon
some credit.

Regarding lock-in, I think you are right but everyone seems to be doing this.

I think for better or worse, part of what Amazon has done has been adapting
what they already were doing in-house into a product. Sometimes when people
just come up with products to compete or "just because," they add in a lot of
nonsense and architect things badly. Microsoft seemed to be going both routes
at different times with Azure. I was an original user of Azure including the
various data stores/data stores they asked for at the time. To say everything
on Azure, whether the machines, data stores, services, libraries, or anything
else were horrible would be an understatement (might be one of the worst major
platforms I've used ever). Amazing how they turned it around when they were
sure they had to compete stronger.

~~~
larkscall
It's irony manifest that companies would consider moving away from vendor
lockin in data centers they own to data centers they do not own yet still
locked into one vendor's platform.

------
NegatioN
I'm only a small user of cloud providers, but find Google cloud engine much
more user friendly than aws, so why is amazon still capturing the market? I
don't see the downsides of GCE.

~~~
Hermel
I am a user of Google App Engine and found its performance unsatisfying. I can
execute the same Java programs 10 times faster on my local machine than in an
app engine instance with the same GHz and RAM according to Google. I.e. what
takes 1 second locally (CPU-bound, no i/o), takes 10 seconds in app engine.

~~~
bad_user
Google App Engine != Google Compute Engine (GCE), of which presumably the
parent is talking about.

~~~
optionalparens
I agree that is what the parent is talking about, however in the context of
GCE, Google Cloud Services which include App Engine and a whole slew of other
services are relevant. Given that if you've used them, there are integrations
and even shared admin areas/dependencies, it is very relevant to talk about
how other services perform in the Google Cloud.

------
saurabhjha
The article didn't answered the how part. All but last two paragraphs are the
things every programmer takes for granted, second last sounds like an ad and
last stats.

But these sites do know how to get people to click their sites.

------
Advaith
Their growth is amazing. Q3 2015 revenue up 78% YoY

~~~
escherplex
That's why Amazon can afford the huge salary increase they offered Jeremy
Clarkson and the old BBC Top Gear crew.

~~~
kuschku
Which is a horrible thing to do from a moral standpoint:

Yes, the Top Gear crew will make you profits.

But is it morally okay to hire someone who just got fired for punching their
director? Isn’t that rewarding horrible behaviour?

EDIT: Please explain why you disagree in a comment – I’d love to hear other
opinions.

~~~
walshemj
I bet on a big Hollywood movie a assistant producer screwing up an evening
meal for a big star would be fired that day and probably black listed.

And he wasn't fired the BBC didn't take up a new contract at least in part due
to lobbying by other media owners who don't like the BBC having a hit show.

Additionally is it fair that James may and Richard Hammond and the rest of the
TG crew lost their jobs

~~~
kuschku
No, it is not fair that the others lost their jobs.

And he was fired – the BBC instantly suspended the show and stopped even
broadcasting all further recorded episodes. That’s as "fired" as it gets.

And it was not that the assistant producer "screwed up", it was that Clarkson
insisted they would stay longer out, then they came so late to the Hotel that
the hotel had no warm food anymore, and then Clarkson punched the assistant
producer.

And how is this behaviour rewarded? With a raise.

(And the "that other group is behaving immoral, so I should too" defense is in
no way relevant)

~~~
escherplex
Well, to quote James May 'Jeremy Clarkson is a complete nob but I like him'
And for the next useless tidbit, heard May was holding out for more cash from
Amazon for the new 2016 series and got it.

------
pinkunicorn
Can someone shed some light on how much it actually costs to run your own
infrastructure? Say that I use 5 large instances of RDS database and then
around 100 large EC2 instances along with ELB's. This will roughly cost around
$1M a year with AWS. Will running your own infrastructure be costlier than
this?

~~~
beachstartup
running a rack of servers will basically cost you $50k a year including the
finance cost of the machines and switches.

it's not the money, it's the expertise that's the limiting factor. very few
people know how to do it reliably.

~~~
dmourati
I think this $50k number is way low unless you are talking bargain basement
data center. Also, doesn't contemplate needed bandwidth. I agree with the
expertise point, though.

Rough numbers:

Server = $5k, straight line depreciation over 3 years, 40 per rack Switches =
$6k, each, "", 2 per rack Rack = $2k/month Power = $2k/month

That works out to: Servers: 40 * $138/server/month=$5555/month Servers: 2 *
$333/switch/month Rent: $2000/rack/month Power: $2000/rack/month

Total: $118,656/year

------
joesmo
"Nowadays, startups just rent AWS servers and storage, and if they suddenly
need an extra thousand servers, they just click on a link and put the cost on
a credit card."

Where's this magic autoscaling link? Last I checked, AWS provided an extremely
unfriendly API on top of extremely buggy services at prices that'd allow you
to build your own data center with the money spent on a few months of renting
VMs. They are indeed the 90's Microsoft of the cloud: incredibly expensive,
buggy, and widely adopted by people that I assume burn cash to keep warm
because they're so rich.

Add to that the possibility that one's account will be closed for no reason
and without recourse, and you have the most unstable platform for apps
imaginable.

~~~
SideburnsOfDoom
> Where's this magic autoscaling link?

Locate the relevant auto scaling group, click "edit" and increase both the
"maximum" and the "desired" number.

[http://docs.aws.amazon.com/AutoScaling/latest/DeveloperGuide...](http://docs.aws.amazon.com/AutoScaling/latest/DeveloperGuide/as-
manual-scaling.html)

I know that it's hardly ever that simple to scale up the whole architecture of
a running system, but ask a trivial question...

------
rtehfm
AWS and Azure are now household names in enterprise. Clients who once only
allowed on premise IT solutions are beginning to bend to vendors will by using
"the cloud".

~~~
skywhopper
This year's AWS re:Invent conference was totally focused on winning over the
corporate enterprise to the Cloud. Compliance, enterprise-scale resources, and
migration solutions were major major pushes in the keynotes and sessions. Day
1's keynote was more for the CEOs in the crowd than for the techies.

------
ranman
"It now has annual revenues in the $8bn range, which is bigger than Amazon’s
entire retail operation and growing three times faster."

The math seems wrong there...

------
sidcool
Does the article answer the 'How' part of the title? Or am I missing
something?

