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AMAZON WEB SERVICES: 'THE MARKET IS HUGE'
Amazon Web Services was first to the cloud scene in 2002, opening up its massive online retail technology infrastructure to host other companies' IT resources. It staked a claim as the cloud leader and has not relinquished it.
With its "We will not be undersold" strategy, the company has repeatedly cut prices and in 2011 added more than 80 services and another 28 in the first quarter of 2012.
Calculating prices for a medium-size server workload, the survey by CRN and Cloud Spectator showed Amazon would post the lowest cost for a yearly contract, with $1,790 per year, well below the $3,656 average of the seven providers studied.
For costs by a monthly contract, Amazon would charg $314, below the monthly average of $329, but more than ProfitBricks, HP and IBM. For costs by hour, Amazon would charg 45 cents, the study's average, and more than ProfitBricks, HP and IBM.
Although the company has developed a reputation for being aloof and automated in keeping with its online heritage, AWS business development director Wise said Amazon believes partners are an essential part of its future.
Wise said Amazon essentially serves two customers. One type is ISVs making products available to customers over Amazon's platform or providing SaaS hosting on the platform.
The other customers are cloud partners and systems integrators. "It's very important that customers have partners they can work with to develop, deploy and open applications on Amazon Web Services," he said.
Amazon is looking for partners, Wise said. "A key criteria of our channel program is that they must add value," he said. "Customers are really looking for the higher value level of services -- application management services, business process management [and] business process optimization."
Solution providers can find opportunities acting as advisers for companies seeking to use AWS, which, some view as complex to navigate.
"There are a lot of opportunities regarding where and how cloud partners can leverage Amazon's Web Services," said ThinkStrategies' Kaplan.
Kaplan listed three areas where partners can work with AWS: adding functionality to Amazon services to meet client business needs; delivering Amazon services as a hosting platform; or using Amazon to power their own operations.
"Cloud partners can act as trusted advisers and can be principal players influencing their [the businesses'] decision and helping companies achieve their objective," Kaplan said.
However, Amazon, like several other cloud providers, has experienced cloud outages. On Oct. 22, AWS went down in its Northern Virginia data center complex; the service disruption lasted most of the day and caused website outages to scores of customers using that service area, including Reddit, Pinterest and Airnb. Earlier this year, in mid-June, a power outage cut services to customers in the same Northern Virginia data complex for about six hours.
Kevin Chu, director of systems and infrastructure with digital marketing and technology company Digitaria, said the Amazon outages did not appreciably affect his company's clients because Digitaria had service contracts for them with Amazon in two service areas, as Amazon recommends. Chu said that placing service contracts with Amazon in more than one service area is advisable, although this incurs extra costs. Educating clients that redundancy isn't built into the cloud is one of the biggest hurdles his company faces, he said.
Amazon has been criticized for its poor communication after its outages, but Wise said the company's dashboard of service availability has become more transparent and the company has worked to help partners develop best practices on developing redundant systems.
Amazon also has worked to make its service more palatable to enterprise use, unveiling a series of features for businesses this year.
In April, Amazon Web Services opened an online store for customers to buy software and services that would help them manage their business on Amazon's cloud. Called AWS Marketplace, the online store offers a variety of technology and business software, such as databases, application servers, developer tools and business applications.
In April, AWS upgraded its cloud partner program, asking its partners to qualify for levels of expertise to receive added benefits, including marketing and sales support, and more technical information. Called the AWS Partner Network, the program, now in beta, invites partners to qualify for "Standard" or "Advanced" tiers.
As far as competitors, Amazon is not thinking about them. "We believe the market is huge," Wise said. "We believe there will be multiple winners."