Only a few weeks after we broke the news of the site’s launch, the team has scooped a substantial windfall by winning the prize — making it the first non-U.S. company to do so since the competition started five years ago.

It seems the site, which turns shopping for clothes into a game, impressed the judges with its pitch, service and use of the cloud. As a result the company gets $50,000 in cash, plus $50,000 worth of credits to use with Amazon: a useful bump for the fledgling service, which has so far been funded by pan-European seed accelerator HackFWD.

The runner up was Boston analytics company Localytics, which has provided plenty of great data on mobile usage and iOS5 penetration. It scooped $25,000 in cash and the same in credits.

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Amazon Web Services (AWS), the public-cloud division, may soon become a billion-dollar-a-year business. But its economic impact is much bigger and wider than most think. It is crucial to the startup revolution that is sweeping the planet.

Or as Amazon CTO Werner Vogels says, with AWS all you need is an idea, a credit card and a dream. In order to push that philosophy, Amazon holds an annual contest, the AWS Start-Up Challenge, which is now back for its fifth year. 

The annual Amazon Web Services (AWS) Start-up Challenge is back with an expanded worldwide footprint! This annual contest, launched in 2007, is a way for promising start-ups to get noticed and compete for an opportunity to win up to $100,000 in cash and AWS credits.

This year, we will select 15 regional semi-finalists: 5 each from the Americas, Asia Pacific (including Japan), and EMEA (Europe, Middle East & Africa), respectively, who will each receive $2,500 in AWS credits. From these, we will select a minimum of 6 finalists to be awarded a package of $10,000 in AWS credits and a trip to Palo Alto, California, to attend the final round of judging.

Then, after a day of meetings with our judges, we will announce one grand prize winner at a public event for start-ups and investors. The winner will receive a package that includes $50,000 in cash and $50,000 in AWS credits. Read more about the full prize list. (via AWS Start-Up Challenge)

Previous winners include M-Dot Network, GoodData, Yieldex and Ooyala.

Photo of Werner Vogels by Om Malik

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Twitter users can simply go to http://theirtwitterusername.fyels.com to claim their personal drive, then authenticate their accounts through Twitter’s OAuth implementation. Fyles also includes embedded audio and video players for various media file types, making it a great solution to quickly share video footage via Twitter. Check out my own Fyels drive here.

Fyles is being developed by Omnissient, a company based in Brisbane, Australia, and Omnissient Director Dominic Holland told me via email that Fyles was originally meant to be a tool to help with the development of other projects. “Being developers, we are constantly moving files between computers and servers, and we wanted a fast and free way to do that without time, or monetary restraints,” he said.

However, Fyles took off right away, and is now well on its way to attracting 80,000 registered users within one month of its launch, said Holland. His company took this as a sign to concentrate on the service and sideline all other projects.

Fyles utilizes HTML5 for its user interface, and the back-end is also state of the art: “The platform utilizes Redis/NOSQL for the database engine, hence the speed”, explained Holland. “It runs across a number of large EC2 instances, and storage is hosted with S3, and we utilize the Cloudfront CDN for all downloads.”

Holland told me his company wants to offer the service ad-free for the time being. “We do have monetization strategies in mind, but they are absolutely not being a key focus for us at this stage,” he said, adding that the main goal for now is to grow the site’s user base.

To be honest, I’m a little skeptical how sustainable this will be. I’ve seen plenty of startups offer free file hosting plans, only to quickly scale down its offering in face of exorbitant bandwidth and storage bills. S4ve.as and Podmailing are only two that come to mind. That being said, Fyles does look like a great service, so let’s hope it stays around for at least a little while.

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But with all the bad news about recent outages from Amazon, the high-profile consumer data breaches like that from the Sony’s Playstation Network and continuing disruptions to services like  Tumblr, it’s time to ask: Could consumers start to lose confidence in the cloud?

While there’s no real hard data today about whether consumers are losing confidence in the cloud — other than possibly looking at trending of search terms about major outages — I have to wonder if the continuing string of outages, breaches and overall high-profile downtime is starting to tarnish the larger cloud brand. After all, chances are, at some point most consumers have been affected, either by downtime to a favorite service or something more serious like a data loss or (God forbid) their personal data compromised; at some point, those users might start to distrust this fuzzy concept they think of as cloud.

Part of the problem here is one of education. It’s difficult in the consumer world, where many have a nodding acquaintance with technology but no real hard understanding, to explain why the evolution of web architecture is better off with such things as Amazon Web Services. Most don’t have time to really grasp these finer points, nor would the technology world expect them to.

And that’s why the cloud could ultimately experience a branding issue.

Right now, the cloud brand is still probably strong and still, despite the spate of bad news, holds a certain cachet. At the same time, however, the noise around high-profile cloud outages, breaches and failure has been getting steadily louder, reason enough for the industry to collectively take notice and, perhaps, collectively take action before the word “cloud” becomes a dirty one.

So what should it do? First off, I think many of the services that experience problems — the recent Gmail and Netflix outages come to mind — would benefit from faster and more transparent communication of the problem. Often, hours or days go by without any real communication of what is going on, leaving many wondering what exactly the extent of the problem will be. If there’s anything to be learned from politics, it’s to get ahead of the problem by communicating early and often.

But perhaps more important, the industry could collectively communicate how they’ll protect consumers from these types of problems in the future, either through concrete steps they lay out, or issuing a series of best practices that consumer cloud services could follow.

What would this collective look like? Hard to say. Possibly working within existing groups such as the Open Cloud Consortium, who offers reference architectures, but could also incorporate best practices for web-services companies around outward-facing communication. The same companies could also create a consumer-facing group that could explain the benefits of cloud computing vis-a-vis other technologies as well as provide consumer “best practices” (such as back-up).

Clearly, it’s not an easy issue to tackle, but it is one that needs attention. With new services being launched almost daily, it’s time for the industry to act before “cloud” becomes a dirty word in the mind of the consumer.

For more analysis on how recent outages could impact consumer behavior, see my weekly update at GigaOM Pro (sub required).

Image courtesy of flickr user edvvc

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As I discuss in my weekly column for GigaOM Pro (sub. req’d) VMforce and Heroku are public versions of what, up until now, has been a largely internal phenomenon — “adaptive PaaS.” They allow developers to launch applications without writing to the cloud platform; instead, the platform adapts the code to take advantage of the platform’s capabilities. Both VMforce and Heroku currently are limited in scope — VMforce within the Salesforce.com environment and Heroku to Ruby developers — but VMware is planning an expanded PaaS presence, and Heroku intends to open its service to new languages.

The popularity of Amazon Web Services (AWS), meanwhile, continues to grow. This week alone, Netflix expanded its EC2 usage to include some of the video service’s most important features and the White House migrated the Recovery.gov web site entirely to EC2. Investment firm research shows AWS crushing competitors’ offerings in terms of adoption, as do analysts looking solely at website hosting. AWS certainly doesn’t have a market share problem at present, but as IaaS resources become commoditized, value-added, “adaptive” PaaS offerings — and even value-added IaaS offerings — could start eating into its lead.

So, my question is this: If AWS really will be simplifying management within the coming weeks, what are the chances it does so via a PaaS offering of sorts? AWS has the tools to build a holistic PaaS offering, the economies of scale to make it profitable, and the SDKs to cater to specific set of developers. If it does so, the cloud computing discussion will take on an entirely different tenor as PaaS providers scramble to differentiate themselves from AWS in this area, too.

Read the full story.

Photo courtesy Flickr user Dominic’s Pics photostream

Much of this is a pre-emptive strike at Microsoft’s upcoming cloud offering. Microsoft has a huge advantage: It owns the stack from OS and virtual machine through to application. Amazon wants to compete on reliability and performance, rather than software suites and licensing. But there are still some things missing before enterprises will really embrace it.

Back in May, most of the people we asked were more likely to trust Amazon than Microsoft with their enterprise applications. But while enterprise customers are using Amazon already, in many cases that use is limited to a department or a short-term project. If Amazon wants to capture entire IT departments, it needs to prove it’s as good or better than in-house infrastructure. And that means delivering responsive, highly available applications, not just an SLA.

To accomplish this, Amazon needs to tackle performance and availability at an architectural level. When companies build their own applications, they rely on building blocks like load-balancing, WAN acceleration, managed DNS and redundant data centers. Fortunately, this is where much of Amazon’s roadmap leads.

• Network performance: Amazon’s CDN will get static content closer to users. With availability zones, Amazon can also get computation near the edge. All of this reduces the time it takes to deliver bits to users. But it can be faster still: Modern enterprises squeeze every millisecond out of the network. Amazon should also add route optimization, HTTP and TCP optimization to really address network delay.


Amazon's plans for integrated scaling, monitoring, and load balancing in EC2

• Processing performance: Internet architects improve server performance with load-balancing. First send the request to the fastest data center, then send it to the fastest machine in that data center. If there aren’t any fast machines, the newly announced dynamic scaling will make new ones. All that’s missing (though hinted at) is the ability to measure user experience so EC2 knows when to add new servers. Amazon needs a complete load balancing/monitoring/scaling strategy — with proper controls so IT staff can manage it — to make elastic computing a reality. While they’re at it, a performance SLA would be great, too.
• Network availability: Those same load balancing technologies improve uptime, using DNS or BGP to bypass unreachable data centers. Amazon needs to launch a SimpleDNS service, tied to availability zones and performance, that gives operators more control. It’s going to have to deal with DNS when it launches its CDN anyway. This looks less like managed DNS (Amazon uses UltraDNS already) and more like products from F5, Citrix or others. Amazon also needs to open up about its carriers and peering arrangements for enterprises to feel comfortable.
• Processing availability: Big Internet sites don’t achieve high uptime with machines that always work. Instead, they monitor for failure and then have the load balancers take out bad servers. That way, overall availability can be high, even when individual components are broken. Amazon should add load testing and profiling capabilities – particularly since EC2 doesn’t give users deep visibility into the platform — to ensure that applications work worldwide under stress.

As Amazon CTO Werner Vogels pointed out, enterprises like cloud computing for its economics, its elastic capacity and its ability to deliver high reliability. With this roadmap, Amazon goes after Microsoft’s weak spots. But it’s not there yet.

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For enterprise customers that want to operate their software on multiple operating systems or on multiple platforms the news could be compelling. Essentially, RightScale is offering customers a one-stop-shop for managing and provisioning different types of clouds. With such an offering it’s as easy to run applications in Windows-based clouds offered by GoGrid as in Linux-based clouds as offered by Amazon.

This will help with the problems of ensuring reliability and the pain of dealing with platform specific clouds, issues I wrote about a few months ago in why enterprises are not ready to trust the cloud.

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Apple’s MobileMe went on the blink for many while the GMail blackout that left millions angry and frustrated. Even Amazon’s seemingly fool proof S3 service was down for an extended period of time, impacting thousands of its customers. This isn’t the last we have seen of these outages. As the size and scope of cloud computing grows, so will the problems and the need for tools to monitor the clouds.

Enter San Francisco-based web infrastructure monitoring service provider Hyperic, which recently launched CloudStatus, a hosted real-time cloud monitoring service to keep an eye on cloud–based services. Thus far CloudStatus is monitoring Amazon’s web services, but sometime later today, the company will start monitoring Google’s App Engine infrastructure, a move that has been blessed by the search engine giant. The service, still in beta testing phase, is free for near foreseeable future, but company might charge for premium services at a later date.

To describe it in super-simplistic terms, this is how the service works: Hyperic has developed an application that runs on the Google App Engine and essentially sends all sorts of information to an agent sitting in Hyperic’s data center, which in turn passes it onto Hyperic’s main offering. Through a web-browser interface, folks can in turn keep an eye on the status of the cloud.

What will it do for Google App Engine users? Javier A. Soltero, CEO of Hyperic said that it will help users answer questions like “How fast is the App Engine cache service running?” or “What’s the response time to Facebook’s API from App Engines perspective?” and other such questions that can help keep apps healthy.

The company can do this is because it is based on agents that are deployed both inside and outside the “cloud infrastructure” and are specialized for the kind of services they monitor. A storage agent, for instance may monitor latency, throughput and remaining capacity. A compute engine agent would monitor load, availability and response times.

Taking measurements from both sides of the wall — that is, from inside the cloud providers operation, and from the outside looking in — gives Hyperic an advantage, says Soltero, who claims that it “picked up the Amazon S3 problems about 20 minutes before Amazon announced (the outage.)” He explained that the service is capable of monitoring any number of different clouds, and it will add more cloud providers to the list.

For Hyperic, CloudStatus is a chance to stand out amongst its competitors. While companies like Stubhub, Comcast and CNET have adopted Hyperics web monitoring tools, the company has little traction inside the enterprises. On the web-side, several companies such as Gomez, Keynote and Webmetrics offer Hyperic-like services.

Cloud computing, however, is a new game where Hyperic can make a play to win — though it would need to add depth and value to its offerings. After all, looming in the background is the distinct possibility that some day Amazon and Google will rollout their own monitoring services.

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It was no different this time around. I first learned about today’s outage when avatars and photos (stored on S3) used by Twinkle, a Twitter-client for iPhone, vanished.

My big hope was that it would come back soon, but popular S3 clients such as SmugMug were offline for more than eight hours — an awfully long time for Amazon’s Web Services division to bring back the service. As our sister blog, WebWorkerDaily, points out:

With two relatively serious outages in the space of 6 months, some will be asking the question of why depend on S3? The answer is simple: the rates are hard to beat, especially for service that doesn’t require any sysadmin budget.

That said, the outage shows that cloud computing still has a long road ahead when it comes to reliability. NASDAQ, Activision, Business Objects and Hasbro are some of the large companies using Amazon’s S3 Web Services. But even as cloud computing starts to gain traction with companies like these and most of our business and communication activities are shifting online, web services are still fragile, in part because we are still using technologies built for a much less strenuous web.

Update: Antonio Rodrigez, founder of Tabblo, now part of HP, on his blog asks the $64,000 pertinent question:

…if AWS is using Amazon.com’s excess capacity, why has S3 been down for most of the day, rendering most of the profile images and other assets of Web 2.0 tapestry completely inaccessible while at the same time I can’t manage to find even a single 404 on Amazon.com? Wouldn’t they be using the same infrastructure for their store that they sell to the rest of us?

Update #2: Building an offline redundancy for Amazon S3 could be big opportunity, Dave Winer says.

Update #3: A reader sent me an email and asked these two questions

• Is the system designed to be fault tolerant? If yes, then how did it go down? After all they must have massive arrays and mirrors of their storage infrastructure.
• Is this a hardware failure or a software/design problem?

Random Thought: The S3 outage points to a bigger (and a larger) issue: the cloud has many points of failure – routers crashing, cable getting accidentally cut, load balancers getting misconfigured, or simply bad code.

Update/Statement from Amazon in response to our questions:

As a distributed system, the different components of S3 need to be aware of the state of each other.  For example, this awareness makes it possible for the system to decide which redundant physical storage server to route a request to.

We experienced a problem with those internal system communications, leaving the components unable to interact properly, and customers unable to successfully process requests.  After exploring several alternatives, the team determined it had to take the service offline to restore proper communication and then bring service online again.

These are sophisticated systems and it generally takes a while to get to root cause in such a situation—we will be providing our customers with more information when we’ve fully investigated the incident.  We’re proud of our operational performance in operating S3 for almost 2.5 years, and our customers have generally been pleased with the reliability and performance of the service. But any downtime is unacceptable and we won’t be satisfied until it is perfect.

Amazon S3 is used heavily by a number of services behind Amazon’s retail websites.  Those services were impacted, but the retail website did not show noticeable problems because it mostly uses cached data.

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For now, the new UMTS/HSDPA network is available only in New York, but there are plans to roll out the network in other cities later this year. The company is being vague about in which cities it will launch the network. There are four handsets that can be used with this network: Nokia 3555, Nokia 6263, Samsung t819 and Samsung t639.

T-Mobile claims that AWS spectrum effectively doubles their spectrum and makes it easy for them to manage future growth. The network operates over 1.7 and 2.1 GHz bands. T-Mobile had spent a total of $4.2 billion in the AWS spectrum, and there are rumors that the company might look at buying even more AWS spectrum from Nextwave. We had reported earlier that Ericsson and Nokia were equipment suppliers for the network that was originally supposed to launch in 2007.

T-Mobile isn’t the first company to launch a network based on AWS. That honor goes to Stelera Wireless, an Oklahoma City-based rural broadband service provider that launched a much faster network in two Texas cities.

What this news means?

• Over the long term, this is a great development because it gives us another 3G option. The current players: AT&T, Verizon and Sprint have not gotten into price competition because the demand for mobile broadband has been strong. T-Mobile, being the late-comer is going to have to offer much cheaper packages in order to steal market share away from the big three. I think that would force the other three to respond. The same dynamics had played out in the voice market as well, so lets hope for an encore. Of course, all this is predicated on T-Mobile’s ability to roll out a nationwide network.
• In the short term, the paucity of handset choices and limited network availability mean that it will be a while before people are going to seriously consider T-Mobile 3G as an option.

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Following his keynote, I got on stage with Schwartz and asked him a few questions. I queried him about Sun and its cloud computing efforts, given that it was nearly a decade ago that then-CEO Scott McNealy started talking about how “the network is the computer.” In response, Schwartz said they have some interesting news coming out later this week. He refused to give the details, but he seemed pretty excited.

When I asked him about Sun — and cloud computing especially — in light of the recent trend in which startups now have more of an affinity with Amazon Web Services than Sun, Schwartz replied with a question: “Do you think it would make sense for us to partner with Amazon to offer free info on the cloud?” I guess, I said. “Then you’ll be paying attention to the announcement we make tomorrow with what we’ll be doing with Amazon.”

He pointed out that Amazon has done a great job of evangelizing the whole notion of cloud computing, and of bringing infrastructure as a service to startups. “Amazon knocked the ball out of the park,” he said. For Sun, the opportunities are with mid-size and large corporations — banks, pharma and financial companies — that need to build their own clouds because they cannot use Amazon type on-demand computing due to certain legal and regulatory limitations.

Schwartz said that startups are important for his company, because as they grow they create demand for Internet data centers, which ultimately boosts demand for his company’s products: hardware. When I was asking him questions, at one point he admonished me for thinking of Sun as a server company. Sorry Jonathan, I can’t be blamed, having followed Sun for such a long time, for thinking that way!

He pointed out that Sun means different things to different people. To web developers, Sun is MySQL; for teens it is the Java logo before they start playing a game on their mobile phones; for the high-performance computing community, Sun is Lustre. In the end, all of these efforts, including the company’s backing of the open-source and free software movements, are meant to drive sales of more hardware, Schwartz explained.

I think it’s part of the challenge Sun faces as a company, because it’s hard to outline the new complexity of Sun to Wall Street. The explanation becomes harder to explain in light of financial results that were, well, light, and led to 2,500 people getting the pink slip.

When I asked him about that decision and how it weighed on him, Schwartz turned the question back on me. My response, I suppose, as a capitalist, is that tough decisions come as part of doing business. That kind of attitude, Jonathan said, leads to sweatshops and doesn’t result in lasting cultures. “We are a company whose assets go home every night.” I think this one time, he gets to have the last word!

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As the AWS blog explains, up until now you were able to attach 160 GB to 1.7 TB of storage to an EC2 “instance.” (An “instance” is essentially the server.) As long as the server was running, the storage remained available. Once you shut it down, the storage disappeared. “Applications with a need for persistent storage could store data in Amazon S3 or in Amazon SimpleDB, but they couldn’t readily access either one as if it was an actual file system,” the blog says.

Amazon CTO Werner Vogels, a keynote speaker at our Structure 08 conference, on his blog describes persistent storage this way: “It basically looks like an unformatted hard disk. Once you have the volume mounted for the first time you can format it with any file system you want or if you have advanced applications such as high-end database engines, you could use it directly.”

In other words, this new persistent storage essentially acts like an external hard drive “attached” to your “instance.” It can also be plugged into more than one “instance,” thus making it a shared drive. (I misreported the deleted bit. Error is regretted.) We are a little intrigued by how Amazon is making this happen. Some experts believe that it might be via using iSCSI. But persistent iSCSI at such large scale is expensive. (If anyone has a better explanation, please let me know.)

What it all means is that AWS/EC2 has gone up a few notches in terms of reliability. This reliability will go a long way towards the company offering service-level agreements to customers, especially large enterprises that want to utilize Amazon’s on-demand infrastructure. Alistair Croll earlier this month wrote a post in which he argued that Amazon was going after larger corporations, and today’s announcement bolsters his theory.

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Take Mosso, an on-demand hosting start-up backed by Rackspace of San Antonio, Texas, as an example. For $100 a month, Mosso is offering 50 GB disk-space and 500 GB bandwidth and 3 million web requests per month. Beyond that it is 25 cents per gigabyte for bandwidth and 3 pennies per 1000 requests.

Mosso Co-founders Todd Morey and Jonathan Bryce, both ex-Rackspace employees, are going after startups and web app developers with their new “hosting cloud.”

While Mosso seems to be an easy enough service to use, with a simpler pricing structure, it is hard for me to think of it as a “cloud computing” service like the way I think of Amazon Web Services. AWS, for example, charges for what you use. There is no upfront monthly fee, a business practice common to hosting services. Moreover AWS offers pieces of the infrastructure — computing, storage, etc. — on demand, not as a packaged solution.

From that perspective, Mosso is competitive with Joyent, a Marin, Calif.-based startup that recently started offering such scale-as-you-need-to services to Facebook application developers. That said, I think Mosso-type services are good for the hosting business, and also for startups and web app developers, since they provide a simpler pricing model along with the ability to scale.

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The company is offering service in many different flavors, including residential and business packages that cost anywhere from $60 to $100 a month. The speeds on an HSPA network are up to 7.2 Mbps downlink and 2 Mbps uplink. The service uses the I-HSPA technology from Nokia Siemens Networks, and can offer download speeds of up to 42 megabits per second. Stelera owns 42 AWS licenses across the U.S., mostly in rural communities.

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This service works in close conjunction with Amazon Simple Storage Service (Amazon S3) and Amazon Elastic Compute Cloud (Amazon EC2), collectively providing the ability to store, process and query data sets in the cloud.

As we’ve already noted,

…the center of gravity is shifting away from monolithic centralized data management to massively parallel distributed data management.

If you are in the business of managing massive amounts of distributed data, you cannot gloss over the Amazon WS trifecta — data-in-the-cloud is the future and with WS, Amazon is way ahead of the pack.What about the offerings of other vendors? Google, for example, has BigTable, and truth be told, SimpleDB has a distinctly BigTable-ish feel to it. But a side-by-side comparison makes it clear that Amazon WS in general – and SimpleDB in particular — is superior, for the following reasons:

• Google’s offerings – not only BigTable but GoogleBase, Gdisk, etc. — all have an ad hoc, grab-bag-of-tools feeling to them, devoid of any integrated strategy. Or if there is one, it is well-hidden.
• Amazon WS clearly involves a well-designed master plan aimed at changing the face of software as a service, each new offering akin to a chess piece in a game focused on creating strategic long-term value. And with SimpleDB, the queen has moved to the center.
• Amazon WS is based on the YOYODA principle — You Own Your Own Data, Always. Along with Amazon S3, SimpleDB is a sharp arrow in the quiver of open data proponents.
• Amazon WS includes a built-in, flexible payment system so users are neither forced to offer their app for free nor have an “ad-supported” model forced upon them. Now you can build a data-based web app on SimpleDB and seamlessly charge for it.

Tersely put, SimpleDB is hugely disruptive. It will take some time to evolve the new thinking patterns and new design disciplines that this technology forces us to consider. To do so, consider this breakdown of the similarities and differences between SimpleDB and conventional relational databases.

Very, very simplistically speaking, domains are like tables, with items like rows and attributes like columns. A query cannot cross domains, so in this analogy you can’t “join” domains. But that sort of thinking is a holdover from the relational database normalized model.In reality a domain is much more like a database, so we have to stop thinking in terms of tables and joins.

Say we had an SQL database, with tables for “Company,” “Departments” and “Employees.” In SimpleDB, the items (rows) for all three could all go in one domain (database), with it you can run queries on this domain and using operators like UNION and INTERSECT, you can do the equivalent of joins.Existing web technologies such as Ruby on Rails, Django and Hibernate all have an Object Relational Mapper (ORM), which maps language objects to relational database tables.

If designers of these ORMs want to stay in the scalable apps game, they should take a serious look at using SimpleDB as a data store. Better yet, they should build ORMs from the ground up to integrate with SimpleDB.More than two years ago I wrote that Web 2.0 needs Data 2.0. The combination of EC2, S3 and SimpleDB is a toolkit for assembling massively scalable REST addressable web databases. Data 2.0 is now officially here. May the fun and games begin.

Nitin Borwankar is a database guru based in San Francisco Bay Area. You can find his writings on hisblog, TagSchema.

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