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Pros and Cons: Digging into Amazon Web Services

Most enterprises are aware of Amazon Web Services (AWS), which has hundreds of thousands of customers. But many are unaware of just how extensive AWS’ offerings are across the broad spectrum of IT capabilities. 

AWS is a wholesaler that delivers compute cycles from their cloud data centers at a very low price. They offer services that will run your entire IT environment (compute, networking, storage, database, application services and management) from the cloud and reduce your on-premise hardware footprint. 

So how did an online retailer become an IT giant? After over a decade of building and running the highly scalable web application Amazon.com, the company realized that it had developed a core competency in operating massive scale technology infrastructure and datacenters, and embarked on a much broader mission of serving a new customer segment—developers and businesses—with a platform of web-based services they can use to build sophisticated, scalable applications. 

In 2006, AWS officially began offering developers access to in-the-cloud infrastructure services based on Amazon's own back-end technology platform. This catapulted infrastructure-as-a-service (IaaS) to a new level of availability and visibility within the enterprise sector. Before AWS launched in 2006, businesses would take on the significant capital investment of building their own infrastructure, or contract with a vendor for a fixed amount of datacenter capacity that they might or might not use. This choice carried the risk of paying for wasted capacity or having to worry that the amount of capacity they forecasted was insufficient to keep pace with their growth. 

AWS has changed the game by offering a comprehensive and proven new way to implement and manage business technology infrastructure. . The services that AWS offers are based on Amazon’s own back-end technology infrastructure, which they’ve spent over a decade building into one of the most reliable, scalable and cost-efficient web infrastructures on the planet. The AWS platform has grown rapidly since the first service launch in March 2006, and it is now the underlying infrastructure for businesses around the world – from start-ups to enterprises to government agencies. 

Here are some “pros” to consider when evaluating the benefits of AWS:

• More than 5x the compute capacity in use than the aggregate total of the other fourteen leading providers in the market
• 7 years in the market with hundreds of thousands of customers in over 190 countries running every imaginable use case on AWS
• Groups of data centers, which it calls "regions," on the East and West Coasts of the U.S., and in Ireland, Japan, Singapore, Australia and Brazil; it also has one region dedicated to the U.S. federal government
• Attained most industry standard compliance certifications: HIPAA, SOC 1/SSAE 16/ISAE 3402 (formerly SAS70), SOC 2, SOC 3, PCI DSS Level 1, ISO 27001, FedRAMP, DIACAP and FISMA, ITAR, FIPS 140-2, CSA, MPAA
• Thousands of independent software vendors like SAP, Oracle, Adobe, Microsoft, Esri, etc. have made their software available on AWS to customers along with go-to-market partnerships with system integrators (such as Capgemini, Cognizant and Wipro) that provide both application development expertise and managed services

But, is AWS for everyone? Maybe not. Here are several considerations to keep in mind:

• The learning curve for a software-defined data center is sometimes steep for larger enterprises
• Billing is extremely confusing; NPI recommends going through a reseller for a more detailed monthly bill
• AWS does not include enterprise-grade support by default. Customers will need to buy Business tier support for this, which carries up to a 10% premium on the customer's overall AWS spend
• Almost all enterprise customers require a custom agreement (vs. the click-through agreement online), and significant terms-and-conditions negotiation
• Have experienced high profile outages in recent history

There’s no argument that AWS has transformed the way companies consume IT. But that doesn’t mean the process of buying and managing AWS’s offerings is easy. Like any IT purchase, it’s fraught with pitfalls – especially if you’re not one of their largest customers. Many small and mid-size enterprises are unable to get the support and guidance of an AWS representative. 

If you a current customer of AWS or you are evaluating their services, NPI can guide you and help optimize your spend. Our insight into AWS contracting and negotiations will enable you to get the most from your investment and maximize flexibility throughout the duration of your contract term.

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