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Amazon throws down the gauntlet for enterprise IT

It's time for the "old guard" in IT to fall, Amazon executives say, but enterprise IT pros prefer a hybrid approach to AWS for the near future.

LAS VEGAS -- Amazon executives left no doubt about the company's enterprise ambitions at the re:Invent show here this week, but few enterprises are ready to jump wholesale into the public cloud just yet.

Amazon execs pooh-poohed the idea of private cloud during the keynote, and gave a brief nod to hybrid clouds. But during a panel discussion Wednesday afternoon, enterprise IT pros said they still prefer a methodical, hybrid approach to migration into the public cloud.

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For example, at McGraw Hill, out of 300 enterprise applications, a subset of 70 has been earmarked for public cloud, and the company has taken a carefully planned approach to migrating applications into Amazon Web Services (AWS).

McGraw Hill started with an "easy win," a non-mission-critical app, according to senior director of strategic initiatives Erica Eatmon, and then moved to a more complex business-critical application, the McGraw Hill Connect Suite.

"The key thing was to ensure the stakeholders were all in alignment," she said. "There were fears that moving to the cloud would impact the customer experience. The platform carries more than 2 million students -- that was at stake."

The app was moved successfully into AWS without those fears being realized, but it's still a hybrid deployment; an Oracle RAC environment supporting the Connect Suite still runs in a separate Datapipe data center.

While a collaboration and file-sharing app has been moved to AWS, access controls have to remain in-house, according to Oliver Alvarez, lead enterprise security architect for the World Bank's International Finance Corporation.  

Businesses won't be able to be competitive without moving to the cloud.

Del Wood, President of l33t Logic

"We need to maintain control and custodianship of information," he said.

Both panelists also said the migration to cloud has had its rewards. McGraw Hill's Connect Suite grew at 40% a year, and buying all the hardware to support that growth was not cost-effective, according to Eatmon.

The International Finance Corporation found a way to create a Dropbox-like environment for collaboration with over 140 different countries while still maintaining appropriate security and compliance controls, Alvarez said.

Elsewhere at the show, consultants who work with enterprise clients said it's only a matter of time before migration to the cloud takes place -- but that time is still needed for enterprise clients to get comfortable.

"People are scared and don't understand it," said Del Wood, President of l33t Logic, a consulting firm located in Waynesboro, Va. "But cost is going to force it -- businesses won't be able to be competitive without moving to the cloud."

In a way, Amazon's lead in the market hurts them, Wood said.

"If there were a close competitor, there would be more perceived safety; people could split their eggs between two baskets."

Amazon's aggressive pitch to the enterprise

While citing its AWS Direct Connect and Amazon Virtual Private Cloud offerings as an accommodation to hybrid cloud deployments, Amazon's keynote presentation was strongly focused on the benefits of a purely public cloud approach to computing for enterprises.

The presentation, led by Andrew Jassy, AWS senior vice president, was especially withering toward the enterprise private cloud concept. 

"Beware the cloud-washers," Jassy said. "Those falling for 'private' cloud are not achieving their objectives."

Amazon's model of low margins and high volumes simply doesn't appeal to the "old guard" of IT vendors, and so they're attempting to attach the 'cloud' label to the same high-margin enterprise hardware and software products they've always offered, Jassy said.

Beth Pariseau is a senior news writer for and Write to her at or follow @PariseauTT on Twitter.

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