Monday, December 14, 2009

Where is Amazon heading?

There is something that I've always found confusing about Amazon's cloud strategy.

The development of EC2 & S3 makes good sense given the suitability of these activities for large scale volume operations (an activity that Amazon, as a book-seller, specialises in).

The growth of an ecosystem around these core services and the provision of these services through APIs are ideal. The solving of some of the transitional educational barriers to cloud (such as persistency through EBS) seems spot on and ... well the list goes.

However, I've never quite understood why Amazon chooses to cannibalise its own ecosystem (the creation of a hadoop service when cloudera existed, the creation of autoscaling when many alternatives existed) rather than buying-out those different groups. I understand why you'd acquire those capabilities but I'd have used acquisition because it sends strong signalling for others to join the party.

Given that, I can't be sure of where Amazon is going to head - more copying, a shift to acquisition, a bit of both?

Other than the eventual need to move into a platform space. the moves towards a spot market could suggest that Amazon might attempt to set itself up as the computing exchange for basic infrastructure resources. To do this, it would also need to define itself as the industry standard (not just the defacto) probably through an IETF certification route and hence encourage other providers to adopt this standard.

Fortunately for Amazon, it already has several alternative open source implementations to support this claim and these open source technologies (such as Ubuntu Enterprise Cloud) provide a quick means for providers to get started.

There is huge future value in the exchange, brokerage and trading businesses for computing resources. It's what I was intending to go after with Zimki, all those years back.

I'm not going to make any predictions for now, I'll leave that until early January. However, if I was a betting man then I wouldn't be surprised if, over time, Amazon :-

  • Goes for IETF standardisation of EC2 & S3
  • Allows reserved instances to be traded on its spot market hence creating a basic form of commodity exchange
  • Enters the platform layer of the computing stack with provision of a development platform
  • Allows other providers (who adopt the EC2 / S3 standard) to sell instances on the exchange
  • Exits the infrastructure provision business by selling on the EC2 / S3 services (at a phenomenal premium) whilst keeping the exchange and any established brokerage business
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