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Amazon reaches out to enterprise IT at re:Invent cloud conference

Enterprise IT has long feared data security in the cloud, but the AWS re:Invent cloud conference made it clear Amazon was gunning for the business.

Amazon Web Services’ (AWS) first-ever trade show was a good first step, experts say, but there’s still work to do to appeal to an enterprise IT audience.

Putting on a show like re: Invent 2012 signaled that Amazon wants to win enterprise business. In many ways an amalgamation of other tech conferences, especially VMworld, the show gave enterprise IT pros and analysts the kind of conference experience they expect.

And Amazon made it clear that it’s gunning for enterprise customers.

During breakout sessions, Amazon officials worked hard to dispel some of the impressions of AWS held by enterprise IT pros, particularly when it comes to security and compliance. Several security sessions—the most popular among them Amazon CISO Stephen Schmidt’s detailed overview of AWS security—were delivered before a standing-room-only crowd.

“This is what we do,” Schmidt said of large-scale data center security operations. “And we do it all the time.”

From the keynote stage, AWS execs talked some trash about “old guard” enterprise IT vendors, contrasting the low-margin, high-volume business model of AWS with the high-margin business model of competitors.

Wooing Enterprises with Data Warehousing

Announced at re: Invent, Amazon’s new Redshift data warehouse is also a direct appeal to enterprises, and the announcement generated plenty of interest at the show.

RedShift is currently available as a preview from AWS. Amazon claims the platform can scale automatically to petabytes in size and will compete with IT’s “old guard” vendors on price. Typically, enterprises pay $19,000 to $25,000 per terabyte of data per year with traditional data warehouses, according to statistics gathered by analyst firm ITG in June 2011. Amazon’s data warehouse can run for as little as $1,000 per terabyte per year, executives said.

If Redshift works as advertised, this may be pricing the enterprise can’t refuse, according to David Linthicum, CEO of Blue Mountain Labs.

“It’s going to be very difficult for data warehouse managers to walk into their boss’s office and make the argument that they shouldn’t go to cloud when it’s one-tenth the price,” he said.

Amazon further sweetened the deal for enterprises by announcing a price cut for its Simple Storage Service, or S3, that ranges from 24% to 28%, depending on the number of terabytes used.

But there are other places where the enterprise and AWS are ships passing in the night. Netflix, for example, was heavily represented at the show, with a keynote by CEO Reed Hastings and other representatives heading up at least a half-dozen sessions. But Netflix’s problems are not enterprise problems, experts say.

“When they roll Netflix out, I always roll my eyes,” Linthicum said. “That’s great if I want to do a video streaming business and compete with Netflix. … But it’s not a large-scale enterprise like an Exxon-Mobil or GM running core processes on AWS.” Amazon executives further departed from the beaten enterprise path when they offered a withering dismissal of the private cloud concept, which is often embraced by enterprises.

Finally, a keynote by Werner Vogels, CTO of, seemed to indicate an assumption on Amazon’s part that enterprises will simply re-architect their applications to suit AWS, defining such apps as “21st-century architectures.”

“At Amazon, we are no longer constrained by [physical] resources,” Vogels said. “So the new world, for everyone, is that you can build architectures that are unconstrained by resources, except maybe the speed of light.

“If you come back in five years, we may have a solution for that as well,” Vogels quipped.

Same Planet, Different Universe

But a full-blown data warehouse is a far cry from where most enterprises are with public cloud deployments today. Instead, enterprise users are asking for live migration, which VMware has offered for years, and is still something off in the distance (if planned at all) for AWS.

Before and during the show, enterprise users said they could use more documentation and reference architectures from Amazon for a variety of applications, especially if they have to overhaul apps in order to migrate to the AWS cloud. If this was specifically addressed at re: Invent, it wasn’t driven home to the same extent as other messages.

Overall, AWS remains a do-it-yourself business, the Home Depot of cloud computing providers rather than the IKEA enterprises would like to see before they invest. The company has a highly recognizable name and offers plenty of raw materials, but today, users still have to find their own way toward what they want to build.

About the author:
Beth Pariseau is senior news writer for and Write to her at or follow @PariseauTT on Twitter.

This article originally appeared in the December/January issue of Modern Infrastructure.

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