The Effect of Cloud
Computing on Growth of
(Case Review: Amazon AWS)
By Sohail Abasi
• Use your existing data center to provide
Why it is a good idea?
• Make a lot of money
• offer services much cheaper than medium-size
company and still make profit
• Leverage existing investment
• New revenue stream at low incremental cost (example:
many Amazon AWS technologies were initially
developed for Amazon's internal operations)
• Defend a franchise (Example: Microsoft enterprise apps
• Jul 2002: Amazon Web Services launched
– Third-party sites can search and display products from
Amazon's web site, add items to Amazon shopping carts
– Available through XML and SOAP
• Mar 2006: Amazon S3 launched
– Innovative 'pay-per-use' pricing model, which is now the
standard in cloud computing
– Cheaper than many small/medium storage solutions:
$0.15/GB/month of storage, $0.20/GB/month for traffic
– Amazon no longer a pure retailer, entering technology space
• Aug 2006: EC2 launched
– Core computing infrastructure becomes available
• Apr 2008: Google App Engine launched
– Same building blocks Google uses for its own
applications: Bigtable and GFS for storage,
automatic scaling and load balancing, ...
• Nov 2009: Windows Azure Beta launched
– Becomes generally available in 21 countries in Feb
• High Cap Ex (Capital
• Charge as much as you
• Guess on Capacity
• Low variable Expenses
• Only pay for what you
• Scale seamlessly up,
Shed capacity as you
Predicting infrastructure need is difficultComputePower
Example: Video App on Amazon EC2NumberofEC2Instances
Launch of a
Scaled to peak of
5,000 instances in 3 days
• Need a new server?
See you in 2 or 3 months!
• Undifferentiated Heavy
Lifting (Spend lots of time of
– Coordinating large teams
– Legacy software
– Heterogeneous hardware
– Scaling and managing physical
– Moving facilities
– Purchase decisions
– Bandwidth management
– Contract negotiation
– Server hosting
• Need a new server?
Spin up hundreds, even
thousands of servers in
• Focus scarce engineering
resources on Agency
How did Amazon get into Cloud
• Working on it for over a decade
• Development of a platform to enable sellers on the
Amazon global infrastructure
• Internal need for centralized, scalable deployment
environment for applications
• Developers were hungry for more
1. Zero upfront costs. No admin.
• Without a big investment in cash, or time
• Pay-as-you-go, zero admin services.
2. From your initial customer to your
initial public offering.
• Launching is fast and simple with AWS
• Infrastructure will grow with your business
3. Lightning fast web content.
• Amazon CloudFront is a global content
4. Stay lean as you grow.
• Extend your runway by driving down your
AWS infrastructure costs.
• Scale based on demand
5. Global by default.
• Global expansion doesn’t require a global
• multiple datacenters in multiple geographic
Evolving AWS Worldwide Infrastructure
Amazon Edge Locations (CloudFront & Route 53)
6. Bring your own app.
• Build with the tools you know.
• HTML5 mobile apps, to Django-driven social
• Technology choices which best suit your
• Flexibility to change your mind.
7. Scale up. Scale fast.
• Build architectures from day one that will
scale up automatically with your business.
What is Amazon AWS?
• Different services:
– Amazon Elastic Compute Cloud (EC2)
Virtual machines for running custom software
– Amazon Simple Storage Service (S3)
Simple key-value store, accessible as a web
– Amazon SimpleDB
Simple distributed database
– Amazon CloudFront
Content delivery network
What is Amazon EC2?
• Infrastructure-as-a-Service (IaaS)
– You can rent various types of virtual machines by
– In your VMs, you can run your own
• Examples: Web server, search engine, movie renderer,
University of Pennsylvania 26
The AWS management console
• Used to control many AWS services:
– For example, start/stop EC2 instances, create S3 buckets...
• Content distribution network
– Caches S3 content at edge locations for low-latency delivery
– Some similarities to other CDNs like Akamai, Limelight, ...