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Amazon: Era Of Data Centers Ending

At Amazon Web Service Summit 2012, Amazon's Adam Selipski cites "undeniable signs" of a cloud transition. Within 20 years, most enterprises will run entirely in the cloud, he says.

The era in which most big companies operate their own data centers is coming to a close. Instead they'll turn, slowly but surely, to the cloud. That's the bold prediction Amazon's Adam Selipsky, VP of product marketing, sales, and product management, made Thursday at Amazon's Web Service Summit 2012 in New York.

"That's a very big statement, but people are getting a glimpse of a future in which most enterprises will not own or operate data centers, and those that do will have small, special-purpose data centers," Selipsky told a crowd of more than 3,000 attendees at the Jacob Javits Convention Center.

Selipsky allowed the transition could take as long as "10 or 20 years," but he said there are "undeniable signs" that the move is already underway. A few of those signs were customer testimonials offered during the event, but more on that in a moment.

Selipsky is, of course, assuming that Amazon will be at the forefront of the move to the cloud. At one point during the event, Amazon CTO Dr. Werner Vogels shared stats from The 451 Group showing that Amazon currently has an approximate 60% share of the infrastructure-as-a-service market.

[ Want to survive an Amazon service outage? Read How Netflix, Zynga Beat Amazon Cloud Failure. ]

Selipsky also allowed that Amazon "obviously has a lot more work ahead of it" if masses of enterprise customers are to use Amazon as their data center service. With that he highlighted a handful of the 28 upgrades and releases AWS has delivered in the first three months of this year, including Direct Connect and AWS Storage Gateway. Direct Connect lets companies connect to AWS through private, high-bandwidth connections that bypass the Internet. AWS Storage Gateway lets enterprise customers store snapshots of their data center on the Amazon S3 service for backup and recovery.

Executives also highlighted Amazon DynamoDB, a high-scale NoSQL database service released in February, which Vogels called the most significant new service delivered by Amazon this year because it "eliminates database scaling and performance as a roadblock" to running applications.

The best evidence that Amazon (and its cloud competitors) just might be able to make good on Selipsky's prediction came through a handful of customer testimonials. Ryan Park, operations and infrastructure leader at Pinterest explained that the fast-growing social website is run entirely on AWS and that, until last month, he was the only engineer on staff. The site currently attracts more than 17 million unique visitors per month and it manages 410 terabytes of data on AWS. That requires 90 high-memory instances of Amazon EC2 compute capacity and 64 pairs of sharded databases (with one master and one slave for redundancy in each pair).

Pinterest also uses Amazon Elastic MapReduce Hadoop processing at a cost of "a few hundred dollars per month," Park said, noting that an unnamed company handling similar processing loads has two full-time employees just to keep a Hadoop cluster running on premises.

Amazon customer CycleComputing uses AWS capacity to handle supercomputing challenges. In the company's largest project to date, CycleComputing was able to draw on 51,000 compute cores from across Amazon's global AWS compute capacity to test potential cancer drugs for the pharmaceutical research firm Schrodinger. The capacity was harnessed in the cloud within a matter of hours, and, according to CycleComputing CEO Jason Stowe, it packed the equivalent power of $20 million to $25 million worth of supercomputing infrastructure. But at Amazon's cloud rates, it cost just $4,828.85 per hour to run the system, and it took only three hours to complete the analysis.

"This means any researcher with a National Science Foundation grant or any person at an academic institution or anyone at a large corporation can now do science that's impossible to do on an internal system in so short a timeframe," Stowe said.

In a third customer testimonial, Jon Brendsel, PBS's VP of products explained the TV network's use of AWS to serve up content and streaming video to more than 30 million unique visitors per month and an average of 115,000 unique mobile visitors per day.

Video streaming is, of course, at the heart of PBS's compute and storage needs, which are supported by nearly 70 databases running on Amazon EC2 and more than 170 storage "buckets" on the Amazon S3 storage service. PBS is streaming 49% of its 145 million monthly video views to iPads, iPhones, and other smartphones, and it's driving much of the video viewing growth.

Three years ago PBS was serving up about 200 terabytes of streaming video per month. Today, one year after the debut of a PBS iPad app, the content provider is streaming more than 40 petabytes of video per month.

"We've grown a lot, but with Amazon's infrastructure, we're set to scale significantly," Brendsel said.

Vogels and Selipsky talked at length about security and reliability, with Vogels detailing Amazon's eight regions of availability, each with separate "availability zone" data centers on separate seismic grids and separate power grids. Of course, despite Amazon's many system redundancies, it has been repeatedly proven that it is not immune to service outages, as we've reported at length.

Vogels also pointed out that Amazon has reduced AWS prices 19 times as it has gained economies of scale. S3 customers saw costs drop by as much as 40% with a price cut earlier this year, he said, while some EC2 users saw their costs drop by as much as 32%. It's this cost promise that may eventually wear down would-be customers who might not otherwise consider breaking out of what Vogels described as "the traditional model of enterprise software development."

"In the old style, enterprises were held hostage with long-term contracts because that was the only way you could drive costs down," Vogels said. "We believe that's wrong ... and if you help us gain additional economies of scale, we believe you should benefit. And that's why we've reduced our pricing."

The pay-as-you go nature of the cloud makes ROI calculation seem easy. It's not. Also in the new, all-digital Cloud Calculations InformationWeek supplement: Why infrastructure-as-a-service is a bad deal. (Free registration required.)

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User Rank: Apprentice
4/23/2012 | 1:28:27 PM
re: Amazon: Era Of Data Centers Ending
For me, this is a mis-statement. Not the end of the local data center in 10-20 years but looking at the local data center in a different light as in more "virtual", i.e. in the management of centralized computing resources and maybe a growing need to make available (or rather expose) software and data beyond the corporate center for a more "global user community".

Though public clouds are "fully redundant", your local site (in the traditional sense) is still the endpoint and if not redundant in that sense now, won't be in the future. The reality of the day is still the same for redundancy, not considering limitations or the additional cost for sufficient bandwidth. Current network technologies can't keep up for providing bandwidth.

I'm not going to drone on about cost. Others have chimed in here. But then again, looking into the future. . . who knows. We've also seen the export of IT jobs, to come back home due to cost and quality.

In the end, I can see a blend, definitely not the extreme as Amazon would like to paint the picture (some would call a fantasy).
User Rank: Apprentice
4/21/2012 | 4:08:28 AM
re: Amazon: Era Of Data Centers Ending
In order for business to run entirely in the cloud the cloud services need to become more reliable and disclose exactly where data and apps are located, who has access to them, and when and why things are shifted around. This is especially troublesome when it comes down to laws and regulations about exporting technical know how. Will moving data from a US cloud data center to one in Europe constitute an export? Or moving data to places like China where the local government might even have a high interest in getting their paws on data that isn't theirs, what about that?
The cloud is and will remain a scary place!
Eric H.
Eric H.,
User Rank: Apprentice
4/20/2012 | 9:38:12 PM
re: Amazon: Era Of Data Centers Ending
It's only natural for Amazon to make this self-serving prediction.

I've been in the IT business for quite a while, and I remember everyone saying the mainframe era was coming to an end when PCs first started hitting the corporate workplace back in the early 1980s. 30 years later, and while there are far fewer mainframes running than there once were, they're still out there.

I've given Amazon EC2 a short test drive, and it IS pretty awesome. At the same time, I can't see the major financials and telcos rushing all their critical enterprise apps to it. Maybe some day, but probably not in my lifetime.
User Rank: Apprentice
4/20/2012 | 7:42:47 PM
re: Amazon: Era Of Data Centers Ending
Kinda like timeshare would be the end of corporate computer rooms in the 1970's. Public Cloud has its place in the corporate world but public cloud can not be the sole provider of information services to an active corporation.
User Rank: Apprentice
4/20/2012 | 5:41:15 PM
re: Amazon: Era Of Data Centers Ending
I hope Hybrid Cloud Computing is the end of Server Rooms / Closets (non redundant data connections, power, environmental systems). Replaced by Colo based Cloud Infrastructure payed for by Cloud savings. This is what we can be doing now, so this really makes this the real start of the Cloud Datacenter Era
User Rank: Apprentice
4/20/2012 | 12:34:00 AM
re: Amazon: Era Of Data Centers Ending
A cloud and a data center are not mutually exclusive concepts (for example, clouds usually reside in data centers). That combined with the hubris of making any tech prediction 10+ years out... gives me the sense that the spinmasters at AMZN are out of control. There are also case studies of companies (some public) who have migrated off the AMZN cloud, only to have their own data center and... (drum roll please) cloud.
User Rank: Apprentice
4/19/2012 | 8:47:11 PM
re: Amazon: Era Of Data Centers Ending
What a load of dung. At more than 5 times the cost of doing it in-house, I don't think so! We will have internal clouds, probably a few, if not many of them inside our brick and mortar. Institutions that have to follow many privacy laws will not be out-sourcing their data to be raped by hackers using the very cloud being sold to them.

Who answers these questions: How do I get that physical server rebooted? I need more speed, can you crank up that processor? I need 2 TB of ram and 32 cores running at a minimum of 2.8GHz's, can you do that? Can I spin my data or system to tape archival? How do I know that I wasn't hacked? How do I know you aren't spying on my data? Why am I required to write proprietary hooks into my code to make it run on your "cloud"? Can I bring that code back in-house and run it on our physical servers? Why is the billing so complex that you need a major accounting firm to audit them? So who do I fire or yell at when they screw up? How do you compensate for the speed of light (latency) ? When do I get to buy and use that new technology? Why can't I keep that old legacy application running?

I am so sick and tired of the same old sales pitch rhetoric. Give it a rest already!


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