Is Amazon yesterday’s cloud?

AWS: Reinvent

Every six months or so stories crop up about startup companies leaving Amazon Web Services in whole or in part. Heck, I’ve done a few of those stories myself. These defectors usually cite fear of vendor lock-in as their rationale. And smart competitors — OpenStack players like Rackspace as well as Joyent, SoftLayer et al — do their best to capitalize on this “Amazon-has-gotten-too-big-for-its-britches” meme.

Robert Rizika, CEO of ProfitBricks, USA

Robert Rizika, CEO of ProfitBricks, USA

Wanted: Startups to use our clouds

ProfitBricks USA is the latest to tout its ability to successfully woo startups — it claims 35 to 40 percent of 130 startups that have come aboard left AWS. And today it launched a nationwide program to convince more startups to “break up with Amazon on Valentine’s Day.” Qualified startups — those making less than $1 million in annual revenue — get a 20 percent discount on ProfitBricks IaaS services for a year. A limited version of the promotion rolled out in Boston five weeks ago.

CEO Robert Rizika, who explained ProfitBricks’ take on scale-up cloud computing, said the company offers a modern cloud for a modern era — one with a graphical dashboard to make it easier for mere mortals to deploy infrastructure with drag-and-drop ease. And it offers resources by the minute, not by the hour, which has been the AWS model. ProfitBricks pricing is here.

Some background; Since AWS launched in 2006, startups have flocked to its inexpensive compute and storage infrastructure. In essence, AWS decimated barriers to entry for dot.com boom startups. Until AWS showed up, those fledgling companies  pretty much had to turn a huge chunk of their VC money over to Oracle for database licenses and Sun Microsystems for hardware. Amazon was the only game in town when it came to reliable infrastructure for rent cheap.

Changing times mean changing clouds?

But things have changed. For one thing, a bunch of other very capable, albeit smaller, IaaS players have arrived. They may not be as huge as Amazon, but they’re plenty big for most purposes.

And, while startups were quite happy to rely on low-level Amazon services, many are less wild about moving up to higher-level and more complex AWS offerings like Simple Workflow Services, which make it difficult for them to back out of Amazon if they want to change cloud providers. Some see Amazon’s ever expanding list of services as competitive to their own plans. Many Amazon partners/customers, whether it’s due to fear of lock-in or fear of competition with their primary cloud provider, now run on multiple clouds.

They also find it hard to track the constant  pricing changes and tweaks that get posted to the AWS blog seemingly every other day.  A whole flock of startups has grown up around explaining AWS usage and pricing to AWS customers. So much for transparency. Dissidents also complain that to get the best AWS price, they have to lock into 1- or 3-year contracts for Reserved Instances.

“With us, you automatically get the lowest price, our menu is all graphical — you drag and drop — you don’t need to be an expert to order up your resources,” Rizika said.

Amazon’s enterprise shift

Others say Amazon’s growing focus on enterprise accounts,  a big theme at its inaugural AWS: Reinvent conference last November, is diluting its focus on startup customers.

Whatever the case, two things are certain: First, more credible IaaS players are coming online by the month. Second: Amazon has no intention of ceding ground to any of them. It’s gonna be an interesting year.

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