Amazon Web Services says its business hasn't seen any material impact from revelations about U.S. government surveillance...
By submitting your email address, you agree to receive emails regarding relevant topic offers from TechTarget and its partners. You can withdraw your consent at any time. Contact TechTarget at 275 Grove Street, Newton, MA.
programs, but the company still has battles to fight to expand in Europe.
One battleground Amazon Web Services (AWS) Europe faces has to do with revelations by former U.S. National Security Agency (NSA) contractor Edward Snowden and the agency's wide-ranging surveillance programs last year. Organizations such as the Information Technology and Innovation Foundation, a non-profit tech strategy think-tank, have estimated that U.S. cloud service providers stand to lose between $22 and $35 billion over the next three years as a direct result of the NSA's PRISM surveillance program. Some analyst firms such as Forrester Research, Inc. put their estimates even higher.
While there was heightened suspicion surrounding U.S. cloud service providers last year, AWS CTO Werner Vogels and others say those concerns will dissipate.
"Growth outside of the U.S. is still as strong as it ever was," Vogels said last month.
One CEO of a cloud-based file-sharing service with offices in the U.S. and Denmark said he doesn't doubt that infrastructure growth continues among AWS's existing customer base, but says he's seen a "Snowden effect" in his own business.
Max BuchlerIT consultant, HiQ
"The effect has been pretty dramatic over-rotation on privacy," said Ahmet Tuncay, CEO of Soonr. "We just have to work a lot closer with local partners, and in the case of Amazon, no matter what they say, it's going to be hard to satisfy businesses [that there's no risk]."
Still, Tuncay expects a thawing of resentments from the Snowden revelations.
"Of the businesses that use cloud services, I don't know of any that said, 'Oh, we're going to bring it all in-house and host it ourselves again,'" he said.
Some U.S.-based AWS partners who work with overseas clients think the Snowden effect will be more noticeable over the next few years, even if AWS Europe hasn't seen a negative growth impact just yet.
"It's still really early days for the enterprise in cloud -- there's not a lot of focus on hardcore security apps just yet," said Kris Bliesner, CEO of 2nd Watch, a cloud computing consultancy and systems integrator in Liberty Lake, Washington.
However, "it's on the roadmap in a few years, and we definitely have to have the security functionality to get there," Bliesner said.
Other multi-national companies that base their operations on AWS in the U.S. but work with sensitive data say they're taking a different tack in approaching European markets.
"Genomic data, because of its personal, medical sensitivity, is definitely going to have to be guaranteed to stay within the boundary of the country where the people that donated the data reside," said Alex Dickinson, senior VP of strategic initiatives for Illumina, Inc., based in San Diego, which manufactures and markets systems to analyze human genome data.
Illumina hosts its BaseSpace genome analysis application in AWS in the U.S., but has created an OpenStack-based appliance dubbed BaseSpace OnSite for companies with sensitive data.
"I expect BaseSpace OnSite to be the first of a number of local offerings," Dickinson said.
These issues aren't unique to AWS Europe, Bliesner said.
"I don't even think the problem is specific to cloud computing," he said. "It's a tough issue regardless of what technology you use … it's an issue we're going to have to address as an industry."
AWS vs. Microsoft: Facing a familiar nemesis overseas
Microsoft's Azure cloud service, meanwhile, is making inroads in Europe thanks to its recognizable name and a strong network of partners, according to Max Büchler, an IT management consultant at HiQ, an IT consulting firm in Stockholm, Sweden.
One large company Büchler works with didn't bat an eyelash at the Snowden revelations, but has chosen Microsoft's Office 365 and Azure for cloud.
"There's been a pause in adoption, and it's made companies think more about where data is stored … but it's a temporary concern," Büchler said.
Smaller cloud service providers do benefit from being local, but everyone is growing, according to Rory Duncan, research director for European services for 451Research, based in New York. "It's hard to contradict Werner since AWS doesn't break out its financials, but European managed service providers and cloud providers are definitely growing," Duncan said.
For example, one small provider in Germany that Duncan has talked to has added 2,000 to 3,000 customers a month this year; another in France has added 10,000 to 15,000 customers in the first quarter.
However, the average customer only spends two or three Euros per month with these providers, Duncan said, so Europe is not yet a huge business for anybody.
Still, it's a mistake to think of Europe as a static market or a zero-sum game, Duncan said.
"It's an ever-expanding pie," he added.
Dig Deeper on AWS security
Beth Pariseau asks:
Would you trust your data to AWS Europe? Why or why not?
0 ResponsesJoin the Discussion