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The Magazine

Issue 15

Instant gratification - Why digitalisation has created a world of demanding customers.

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Spencer Green
Chairman, GDS International

Sales and the 'Talent Magnet'

A lot is written about being a ‘Talent Magnet’, either as a company, or as President. It’s all good practice – listen, mentor, reward, provide clear goals and career maps. Good practice for the employer, but what about the employee?
25 May 2011

Will Amazon hold the lead on cloud computing?

Jodie Humphries

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Cloud Computing As the trend topped to be the most implemented this year , everyone wants to be the leader in cloud computing. Now Amazon is looking to widen its lead as the competition heats up. Amazon is aiming to widen its lead in the cloud computing market as computer giants like Microsoft and IBM turn their eye to the same market.

On 28 April 2010, Amazon announced the opening of a to give customers in Asia, India, and Australia faster access to its Amazon Web Services business. Asia Pacific-based businesses or global businesses with customers based in Asia can now leverage the AWS suite of infrastructure web services to build their businesses and run their applications in the cloud. The Singapore data center will target Asian customers and Western companies that have many users in the region, the article Amazon Looks to Widen Lead in Cloud Computing states.

As well as widening its stance in the Asia Pacific area, Amazon is also mulling over the idea of an Australian data centre.

Speaking to Computerworld Australia, Andy Jassy, head of Amazon Web Services and senior vice president said that while the company's newly launched Singapore data centre would likely appeal to Australian SMEs, attracting government and financial sector customers could be a challenge.

"There is no doubt that there will be some customers who will not use our Web Services until we have a data centre presence in Australia and those customers will wait before they leverage our services," he said.

"Some of the organisations which might not leverage the Asia Pacific region data centre are those with regulatory requirements that require the data to be in country ... the government-, pharmaceuticals- or insurance-side."

Over the next few weeks, Amazon plans to introduce simplified management software for more of its 16 cloud computing products.

" Amazon Web Services wants to be the data center for the world," says James Staten, a principal analyst at Forrester Research.

Amazon Web Services

Amazon has a well established business for selling cloud computing services, including processing, disk storage, and database software to what it says are hundreds of thousands of users, at hourly fees based on how much computing power they consume.

"Amazon Web Services can be as big as our retail business, in the fullness of time," says Andy Jassy, the senior vice-president in charge of Amazon's cloud computing business.

Sales for Amazon

It could take years for Amazon's cloud business to rival the size of its retail sales. Citigroup estimates cloud computing services could generate about US$650 million in sales for Amazon this year, or about two percent of its total profits.

In a February report, Goldman Sachs said 77 percent of companies it surveyed using cloud computing development tools were using Amazon's Elastic Compute Cloud service. About 17 percent were using software from Google and Salesforce.com , and 10 percent chose Microsoft's Windows Azure.

Managing cloud computing

As cloud computing grows in popularity , businesses are rethinking how they manage computing. Given the falling costs of transferring data over the internet and companies' realisation that managing complicated hardware and software building blocks is often a losing proposition, many are willing to outsource some of the job. Some venture capital firms "have made it almost a precondition of investing in (startups)" that they use Amazon's cloud software, says Citigroup's Mahaney.

The cloud can lead to significant savings for companies. InstaColl, a Bangalore (India)-based company that sells online productivity software, was able to save more than 60 percent on the cost of running the computing, storage, and networking behind its applications by using Amazon Web Services instead of having its own hardware, CEO Sumanth Raghavendra said.

Amazon may be able to count many large organisations including Eli Lilly, Pfizer, NASA, Adobe Systems and Netflix as customers of cloud computing, but its competitors are hot on its heels. Microsoft has attracted customers including 3M and the Associated Press to Windows Azure, its software for building applications that run in Microsoft-operated data centers. While IBM is also using cloud computing to try to become nimbler and more appealing to startups, which often eschew its pricey and complex software.

For now, Amazon has the lead, but for how long?

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Disclaimer: All comments posted in a personal capacity