For AT&T to now start the process of adopting the public cloud for what are admittedly “non-network applications” is a big move. It shows that even the most stodgy industry verticals are on board with moving to the public cloud. This will provide a significant new revenue stream for those cloud providers but at the same time allow for greater scale that could drive down pricing models.
On Sainsbury’s move and use of AWS, serverless, and DevOps:
“Our relationship with AWS really kicked off at the point we decided to take our groceries online business and rebuild it in the cloud. This was effectively taking a WebSphere e-commerce monolith with an Oracle RAC database, and moving it, and modularising it, and putting it into AWS,” Sainsbury’s CIO Phil Jordan told the audience.
“That movement of RAC to RDS and that big database migration was all done using AWS services, and now we have a fully fledged cloud-native-ish service that runs groceries online across all of our business. Today, we run about 80 per cent of our groceries online with EC2, and 20 per cent is serverless.”
In total, the company migrated more than 7TB of data into the cloud. As a result, or so Jordan claimed, the mart spends 30 per cent less on infrastructure, and regularly sees a 70-80 per cent improvement in performance of interactions on the website and batch processing. So far, there’s been no “major” outages, said the CIO, without defining “major”.
Moving to the cloud has also helped Sainsbury’s into the warm infinity-looped embrace of DevOps. The company has moved from five to six releases per year to multiple releases per day, said the CIO.
Check out their talk, scrub in to about 24:10.
Related, the Sainsbury’s tech blog is pretty good.
And, from elsewhere and unrelated to Sainsbury’s, some clearer notion that “serverless” forces an event-driven architecture:
So why can’t we just write an event-driven system for our corporate infrastructure? Our world, is event-driven, and generally, we reduce the complexity of our systems by just defining events. “When there’s an access to the FTP service of upload … do this …”, “When there’s an access on a column on a database … do this “. In an IoT world, with billions of disparate devices, it is the only way to go. And if we are to create truly citizen-focused systems, we need to define the events which trigger. How many organisations could crisply define the operation of their infrastructure and all the interactions that happen?
Rather than just defining a server running Exchange, we could have some code which triggers on “When Bob logs-in open up his mail box”, or “When Alice changes the marks for her students, send an update to the exams office”. This is a world where the complexity of servers moves us towards “The Cloud” as a computation resource. In this way we write rules based on events and enact them in the Cloud. There’s no concept of running Exchange or Web servers.
As a team, going serverless has given us a lot more velocity, we can rapidly release, we can test the same infrastructure we’re deploying in production, in a pull request environment, in a staging environment, we can rapidly retest ideas- and every developer can do that because we’re using Lambda to load test, so the power it gives you as a developer and engineering team is pretty amazing.
The bank has selected AWS as its preferred cloud provider with the intention of porting its production workloads, including its customer facing platforms and strategic core banking applications to the cloud.
From what I can tell talking with banks, they’re over that 2010 thing of “public cloud isn’t secure enough.” Now it’s a scramble to move their shit up there.
A private cloud box from Amazon:
The Snowball Edge Compute Optimized with GPU includes an on-board GPU that you can use to do real-time full-motion video analysis & processing, machine learning inferencing, and other highly parallel compute-intensive work. You can launch an sbe-g instance to gain access to the GPU.
It has Lamda and EC2 capability, targeted at data
manipulation and getting it into (and out of?) AWS. There’s a lot of IoT stuff in AWS now, opening their platform up to things like smart cities, power grid management, and thermostats and lights and shit.
Original source: AWS’s Snowball Edge
“the massive online retailer once again posted its largest quarterly profit in history — $2.5 billion for the quarter — on the back of two businesses that were afterthoughts just a few years ago: Amazon Web Services, its cloud computing unit, as well as its fast-growing advertising business.”
Good charts, too.
Original source: This is the Amazon everyone should have feared — and it has nothing to do with its retail business
$1.6bn profit, before taxes and such I’m sure.
Original source: Amazon Web Services crosses the $6 billion mark in quarterly revenue, up 49 percent
For 4Q2017: “Amazon Web Services had 62 percent market share in the quarter, down from 68 percent a year earlier, KeyBanc’s Brent Bracelin and other analysts wrote in a note on Thursday. Microsoft Azure jumped from 16 percent to 20 percent, and Google’s share increased from 10 percent to 12 percent, they said.”
Original source: Amazon lost cloud market share to Microsoft in the fourth quarter: KeyBanc
Good round-up of AWS’s private cloud stuff:
- AWS added on-premises support to its CodeDeploy continuous-delivery service in 2015.
- AWS introduced the Snowball storage server companies could use to copy data and then ship it to the cloud in 2015.
- AWS added on-premises support to its EC2 Run Command tool for running shell scripts on many machines at once in 2016.
- AWS unveiled the Snowmobile truck for copying even larger supplies of data and then hauling it off to Amazon in 2016.
- This past November AWS released a container image of its Amazon Linux server operating system for use on corporate servers.
[O]ne well-publicized case in that vein, they said, was Home Depot directly working with Pivotal Software to introduce Pivotal Cloud Foundry to Google Cloud Platform. The home improvement retailer wanted to continue to use the popular development environment in the public cloud, but avoid giving business to Amazon’s largest profit-generating division.
A Pivotal spokesperson told CRN that Home Depot, like other Fortune 500 retail customers using Pivotal Cloud Foundry for app development, prefer Google Cloud Platform or Microsoft Azure above AWS. Pivotal and Google “rapidly accelerated joint R&D efforts to add new capabilities,” he said, “encouraged” by those retail giants.
At the same time, Pivotal and Microsoft have also stepped up efforts to integrate capabilities on Azure, “primarily driven by automakers,” he said.
- Video: “In 2017 Amazon is expected to spend $4.5bn on television and film content, roughly twice what HBO will spend. But it has a big payoff.”
- Prime momentum: “Mr Nowak reckons the company had 72m Prime members last year, up by 32% from 2015.”
- Cloud: “Last year AWS’s revenue reached $12bn, up by more than 150% since 2014.”
- Anti-trust, in the US: “If competitors fail to halt Amazon’s whirl of activities, antitrust enforcers might yet do so instead. This does not seem an imminent threat. American antitrust authorities mainly consider a company’s effect on consumers and pricing, not broader market power. By that standard, Amazon has brought big benefits.”
Our new episode is up, from this past Friday:
There’s tell that some people just look at containers as a cheaper way to virtualize, eschewing the fancy-lad “cloud-native stuff.” We discuss that idea, plus “the enterprise cloud wars,” and also our feel that Slack is actually a really good tool and company.
From William Fellows at 451:
> AWS Managed Services (AMS) includes change management, provisioning and configuration management, event and incident management, security management, patch management, continuity management (backup/restore), and reporting, supported via APIs and AWS services. AWS Managed Services infrastructure building blocks include managed VPC within a specific AWS region; isolation of applications via subnets and security groups; shared services, such as authentication, collaboration and intranet; DMZ access to the internet; and DirectConnect for internal connectivity and access management via corporate AD/Auth systems versus native IAM. (AWS says IAM does not work for the data plane, and is only for the AWS control plane. It uses IAM for the AWS components – the customer can also do an ADFS-to-IAM integration to use their AD credentials for control/data plane access.)
Lots of specific middleware – like targeting mobile users – and a VPS offering, among many other things.
– AWS net sales of $2.88bn were a 58 per cent increase on the year ago quarter’s $1.8bn.
– AWS operating income of $718m was up 135 per cent over $305m in Q2 2015.
With Matt Ray in Australia we discuss the character of the tech scene over in that neck of the woods. We also talk about Oracle’s new positioning as one-stop cloud shop, The Gang of Four/FANG type thinking, and balancing small company culture vs. selling to The Enterprise.
SPONSOR: Interested in speeding your software’s cycle time, reducing release cycles, and a resilient cloud platform? Check out the free ebook on Cloud Foundry or take Cloud Foundry for a test drive with Pivotal Web Services. See those and other things at cote.io/pivotal.
- If you like video, see this episodes’ video recording.
- Oracle’s Shooting for Cloud Relevance – Pretty good article on the overall landscape. Best of Breed vs. Integrated Stack clouds: “any large-scale hardware vendor without a successful public cloud business will have a severely challenged business model.” Since then, EMC has collapsed into Dell, HP has shut down its public cloud, VMware is being criticized by financial analysts for having its business “eaten alive” by the public cloud, and Citrix split itself apart at its shareholder’s behest”
- Amazon misses earnings, still ridiculous – “Amazon Web Services’ fourth quarter revenue grew 69 percent year over year, generating $2.41 billion in sales. But the crazy growth of its cloud is slowing down a bit: two quarters ago, Amazon posted 82 percent growth in AWS revenue; last quarter, sales grew 78 percent year over year. Still, $2.41 billion beats analyst estimates of $2.38 billion.”
- Public cloud market share from Synergy
- 54m Prime members – “Prime has 54 million U.S. members, up 35% from 2014. The report also showed that 47% of Amazon’s total customers are Prime members. These latest numbers follow the recent news that 38% of American households are members”
- Gang of Four: Apple / Amazon / Facebook / Google (Scott Galloway, Founder of L2) | DLD16 – rapid-fire chart porn.
- GitHub hipsters annoyed by “The Enterprise”?
- Micky Mouse cutting a razer-thin bean.
Bonus Links, not covered in show
- Andreessen buying TWTR with PE? – Brandon’s gonna be excited!
- AWS Certificate Manager – New AWS service for free Amazon-provided SSL certs for ELB and CloudFront
Post Alphabet, where any previous inhibitions about pursuing new hobbies have evaporated, it is even harder to imagine the “capital allocators” choosing to invest in thousands of enterprise sales and support people given alternatives involving life extension and/or space elevators. After all, won’t the robotics division eventually solve any problem that today requires humans?
The rest of the state of cloud is pretty good. It’s a regular “pulls no punches and punches everyone” type situation.
If you threw in some charts and numbers, you’d have an even fancier missive, but qualitatively: just Jim-dandy.
“For Q2, AWS brought in $1.82bn in revenue, which was 81.5 per cent higher than in the second quarter of 2014. The division’s operating income, on the other hand, was $391m, a 407.8 per cent annual gain.”
More for the “Amazon competes with everyone” file.
We discuss Amazon Web Service’s financials – is it a lot, a little? How does AWS stack up against the competition and how do you even make a consistent market share pie. Also, we preview DevOpsDays Austin and talk about container management layers like VMware’s Photon and Cloud Foundry Lattice.
SPONSOR: Come check out the Cloud Foundry Summit, a great chance to not only learn about the cloud platform but also hear about how people are using it. It’s May 11th and 12th in Santa Clara. Use the discount code COTE to get 25% of registration.
- If you like video, see this episodes’ video recording.
- AWS numbers are out!
- It’s profitable: “Operating income increased 74% to $255 million in the first quarter, compared with operating income of $146 million in first quarter 2014.” Brandon Butler reported profit of “$265 million with a 17% margin,” so let’s call it a quarter of a billion and walkin’ around millions.
- “Amazon Web Services is a $5 billion business and still growing fast — in fact it’s accelerating,” said Jeff Bezos, founder and CEO of Amazon.com.
- More numbers of what the competition’s doing.
- New York Times coverage has a competition pie
- After-show: those marketshare numbers look OK, they combo IaaS and PaaS which is a fine approach.
- 451 pie chart on LinkedIn, and a related commissioned report 451 did for Microsoft.
- Ali Baba vs. AWS: “Alibaba said it served a 22.8 percent market share of the Chinese infrastructure-as-a-service market in the first half of 2014.”
- VMware: It’s On Like Donkey Kong – VMware Photon
- Initially it looks like Red Hat’s Project Atomic and it supports Rocket and PCF naturally
- While Coté is ill-informed on Lattice, Abby on his team has a good write-up.
BONUS LINKS! (Not covered in show)
- FFS Twitter (Matt) – This won’t end well.
- Microsoft shutters its standalone Open Tech open-source subsidiary: “My take is Microsoft doesn’t need a separate org like Open Tech any more, especially not with the acceptance (and maybe even mandates) from the highest Microsoft management levels to partner with open source companies and developers, rather than to try to take them on as adversaries.”
- Buh Bye SeaMicro
- Is Slack Really Worth $2.8 Billion? A Conversation With Stewart Butterfield – Q: So do you think Slack is worth $3 billion? A: It is, because people say it is.
With all of those caveats, we reckon that AWS has raked in $13.6 billion in revenues over its lifetime, and about $1.8 billion in operating income.
So, profit margins of 13.1% LTM, and an estimated 13.2% on average. Not too shabby for a highly commoditized market.
It’ll be fun seeing what people do with these numbers and how they compare to others, esp. Rackspace.
“HP is not leaving the public cloud market,“ said HP in a statement to CRN that mirrors a statement given earlier this week to VentureBeat. “We run the largest OpenStack technology-based public cloud out there. This has to do with not competing head-to-head with the big public cloud players.”
They’re going "enterprise” that is. And if you pay attention to analyst predictions and their surveys of what companies say they want to buy (mostly private and “hybrid cloud”), that’s likely OK.
When AWS’s financials come out soon, we’ll see what happens. No one (maybe Amazon who could search over their customer’s company names in their profile) really know how much “enterprises” use Amazon: it could be a lot, a little, a bread basket. Many people thing a lot, but existing vendors hope it’s a little.
The question will also be: is AWS additive to IT spend (companies find new things to run on AWS but keep their existing stuff on their “legscy” IT)…or are companies moving workloads to cloud.
The next bucket for modeling out thinking will be: when companies (and ISVs/SaaSes) make new applications, where do they deploy them? Most people would say public cloud, other would get nuanced about managed hosting.
“At least half of the calls I take are clients that are either actively planning or are already actively deploying a multi-provider strategy,” said Mindy Cancila, an analyst with Gartner, Inc. based in Stamford, Conn. “I believe most organizations are going to end up with more than one public cloud provider, whether they realize it yet or not.”
Man, I hope we all start saying “multi-cloud” instead of hybrid cloud.
I used to work with Mindy when we were both at Dell. She’s awesome!
Some good stuff from the latest from the $600m private cloud the CIA got from Amazon, including:
Meanwhile, Wolfe also acknowledged lingering industry criticism of its 2013 decision to award the $600 million cloud computing contract to AWS, essentially putting all the agency’s eggs in one basket. IBM unsuccessfully protested the cloud contract award to AWS. The CIA official defended the contract award this week, saying it provided AWS with nothing more than concrete pads and power to build the CIA cloud datacenters. AWS delivered all other cloud infrastructure and was up and running in less than 18 months, he added.
The scary thing would be if Amazon can build a $100m private cloud…a $10m one…then things get weird for vendors who are trying to achieve asymmetric competition with Amazon by hiding in private cloud land.
Also some fun anecdotes on resistance to change.
I think this is how most vendors think (strategically) about getting involved in OpenStack.
Early on, vendors who wanted to compete with AWS would speak to the idea of an “enterprise cloud.” All the US Federal activity that AWS had been up to – including that $600m private cloud for the CIA – seems to nullify most of that.
I think what will be more important is targeting the type of application supported: old school, three tier app that are statefull everywhere, or cloud native, microservices apps that are stateless (shoving statefullness of to caches and databases).
I’m still looking for a better way to render there if anyone has ideas.
We all use the same type of data center, same type of hardware more or less, there’s definitely margin on the cogs of operating those goods.
Focusing on developers has it’s rewards. From one of Stephen O’Grady’s recent presentations.
Check out the stylee-y on that Netcraft logo!
A few weeks ago, I talked with Chris Kanaracus for his story on Infor moving parts of their application portfolio to Amazon Web Services. Chris said this looked like a pretty strong endorsement for using AWS, and asked for my thoughts, which were:
Yes, this a nice vote a confidence for AWS. However, I think most SaaS companies would look at AWS as capable of being used like this. There might be questions about pricing long-term, but technologically it’s just a stack of middleware running on a bunch of servers. The larger bet by Infor is around that: do they want to align their application to Amazon’s services and cloud-based middleware? (Maybe they’re not and just using raw EC2, S3, etc…but you’d assume they’d want to use things like Red Shift and other services/middleware offered by Amazon).
What with the pricing war that Google is announcing right now (reducing cloud prices by 32% across the board for it’s Google Cloud offering, and deeper for some other services), Infor has to be thinking that the costs will be cheap. The longer-term hope is that their agility – measured by how fast they can code and releases features to their existing products, as well as modify how current features work – will increase as well. We all know in our guts that after 4-5 years, software is incredibly hard to change due to the code getting stale, supporting middleware being antiquated, and the difficulty of shifting around the underlying infrastructure. I’m not sure “cloud” will solve those problem, but hopefully it’ll make it a bit better.
(Enterprises tend to be more leery of relying on cloud and are feeding the current interest in “private cloud”, along with vendors who’d love to preserve that market. Enterprise FUD around public cloud is mostly because their needs are much different than ISVs/SaaSes: enterprises have 100’s, if not 1,000’s of applications behind their firewall that must be supported that may be technologically, culturally, or otherwise incompatible due to drivers like policies and regulations.)
When it comes to making things cheap, few companies have the zeal and credibility of Amazon. While new, mostly non-Microsoft devices are rapidly changing and fragmenting the end-user device market, there’s still a palpable need to support existing Windows applications. DaaS seems like a viable ‘green screen’ strategy for supporting these corporate applications on new devices. While some of the early reviews of Amazon WorkSpaces have surfaced, the usual bucket of 1.0 hiccups, like speed and locale shenanigans, will undoubtedly be ironed out. The DaaS space is just emerging as a broad market, and we predict many players on this scene, each hopefully figuring out new and unique ways to differentiate.
You can always apply for a free trial to take a test run behind the paywall.
We spent part of 2012 and all of 2013 building a private cloud in Virginia, Washington, and mostly Texas. This was a big bet with over $4 million in capital lease obligations on the line, and the good news is that it’s starting to pay off. On a cash basis, we spent $6.2 million at Amazon Web Services, and a mere $2.8 million on our own data centers. The business impact is profound. We’re spending less and have improved reliability and efficiency. Our gross profit margin had eroded to ~64%, and as of December, it’s approaching 74%. We’re shooting for 80 %, and I know we’ll get there in 2014.
About $51,000/month on AWS for those who like to track these things by month.
“AWS will have a long way to go to be able to accomplish this. They will need architects in the field, real people, they will need the help of the channel, allowing them to architect, sell and make good margin — perhaps white-label themselves like we have done with others,” Shepard told CRN.
The contentious section asked the parties to price up a fault-tolerant cluster of 1,000s of commodity servers running a MapReduce scatter-gather job on about 100TB of data with a 100 per cent duty cycle.
In other words, the CIA wanted Amazon and IBM to cost out a cloud cluster that would run MapReduce continuously for a year so spies could prod large chunks of data.
In 2010 we launched 61 of what we considered to be significant products and services. In 2011 it was 82. In 2012 it was 159. This year through September it’s 179, and we’ll be well above 200 by the end of the year.