Blog

What does the Amazon CIA deal mean to the ecosystem?

During the last couple of weeks the media was abuzz with the news that Amazon has inked a $600 million deal with the CIA. While most of the reports talked about the unconventional path that AWS has taken in building a private cloud for the intelligence agency, it has a larger impact on the ecosystem.

Firstly, it’s a huge endorsement from AWS that the private cloud exists and the phenomenon is for real. For a long time, Amazon’s CTO and the Chief Spokesperson for AWS, Dr. Werner Vogels downplayed the private cloud by calling it as a “false cloud.” The CIA deal might be too big an opportunity for Amazon to let go, but it has also forced AWS to relook at the strategy and start evaluating the private cloud market.

Who could be the front-runners in this race? Obviously it is Microsoft and VMware. Microsoft has always looked at Amazon as a competitor only on the public cloud, since AWS directly hurts the Windows Azure business. But now the CIA deal sent a shocker to the folks in Redmond that AWS is ready to flex its muscles, even in the private cloud space impacting the Windows Server and System Center business. VMware must be still recovering from the aftermath of this news, as the company is already worried about the dominance of AWS. This only adds insult to the injury to the VMware camp.

Having smelt the business opportunity, AWS will move fast to capitalize on the private cloud market potential. If the CIA deployment goes well, it’s only a matter of time before AWS starts offering a private cloud flavor. This will force it to figure out a mechanism to emulate the building block services of AWS like EC2, S3 and RDS behind the firewall. It will also mark the official entry of Amazon in the enterprise, which will give the traditional players like IBM, MS, VMware, Oracle and Cisco a run for their money.

The other possibility for AWS is to look at the most compatible private cloud stack and brand it as an official private cloud. Eucalyptus is undoubtedly the right candidate with the API and architecture computability. While Amazon is figuring out the massive deployment at CIA, Eucalyptus can fill the gap. With the official blessings of AWS, Eucalyptus is already making enough noise claiming to be the most compatible private cloud for AWS. This will also make the hybrid cloud story look more complete with Eucalyptus on-premise and AWS on the public cloud.

This also hurts the open source IaaS clouds including OpenStack and CloudStack. OpenStack is positioned to be the ubiquitous cloud of the future. Since enterprises may deploy it on-premise and with the existence of dozens of OpenStack powered public clouds, it’s value lies in ubiquity. But with AWS cloud running on-premise and on the public cloud, it looks more compelling for the enterprises.

It will be interesting to watch how the 800-pound gorilla will walk into the enterprise.