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How Amazon’s cloud competitors are trying to find cracks in AWS’s armor

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It’s not exactly shocking that Amazon(s amzn) cloud competitors are polishing up their PR talking points about the benefits of hybrid cloud. And turning up the volume on their pitches.

Here’s why: As Amazon Web Services keeps churning out services, support offerings and certifications to appeal to corporate and government users (the latest being FedRAMP accreditation), other cloud vendors need to show that they offer value above and beyond AWS. Hybrid cloud, which pairs local processing power with outside cloud resources as needed, is one area that they see as a weakness for Amazon.

AWS versus everyone else

While none of these rivals refer to themselves as AWS killers (smart move), they all see Amazon as the #1 cloud player and the top threat to their own cloud ambitions. When pressed, VMware(s vmw) senior vice president Matthew Lodge acknowledged that “everyone is competing for the same IaaS dollars.” Everyone meaning Amazon and the rest of the cloud contenders.

VMware, which saw, um, limited uptake of the vCloud Director that it pushed service providers to use as the basis for their own clouds, said its new vCloud Hybrid Cloud Services will compete with AWS on price, at least in some cases, but offer other enterprise-worthy goodies.

Said Lodge: when you factor in “hidden costs” in Amazon’s dedicated instances, the playing field levels out. “They charge for I/O and we don’t. They charge for VPN endpoints, load balancers and firewalls and we don’t,” he said.

Rackspace(s rax) president Lew Moorman has a similar message. “Now that public cloud is 3 to 4 years old in reality, applications are bigger and more complex and people are starting to see tradeoffs to using public cloud only,” Moorman told me Thursday.

Structure 2012: Lew Moorman, Rackspace
Structure 2012: Lew Moorman – Rackspace

“When public cloud came out and you could suddenly provision a server in a minute when it used to take 3 months, those were intoxicating advances … you get drunk on them but when things settle in there are tradeoffs,” he said.

For example, what’s great for test-and-dev environments is not always optimal for production workloads, where public cloud costs quickly add up.

Once someone hits the $25,000-a-month milestone, “it’s time to rethink all-public-cloud deployment,” he said.

Joyent trumpeted a similar message this week when it announced a raft of new compute instances it says will be  competitive with AWS.  Joyent, like Rackspace, offers public, private and hybrid cloud options.

Corporate cloud purchases are about more than price and technology

Having said all that, almost every cloud vendor alive will also add that price isn’t the compelling reason to move to cloud. Face it: when it comes to IT-sanctioned technology purchases, it’s not just about the price or the technology. IT departments have established procedures and guidelines for deployment and cloud providers will have to accommodate them.

“Most public clouds — AWS etc. — don’t offer enterprise-class security, compliance or performance SLAs to users,” said Rodney Rogers, CEO of Virtustream, which positions itself as an enterprise cloud provider. “Some public clouds offer supplemental services that dedicate equipment to enterprises/government, but they are generally not multi-tenant  and so deliver less efficiency.”

That means they remain suited for test and dev, for backup, SaaS apps and apps with no performance criteria, Rogers said via email.

Is Amazon’s head start insurmountable?

Granted all of this is self serving talk, but having sat through a raft of CIO panels this week, it is clear to me that some of these points ring true with this constituency.  But, if we’ve learned anything from the past 6 years of its existence, AWS won’t stand still. It now offers several services of its own and through an alliance with Eucalyptus that break down some barriers between a customer data center and its cloud. But until you can run AWS instances on your own infrastructure, AWS will remain a public cloud provider in a world where more workloads could flow to a hybrid model.

Structure 2010: Werner Vogels – CTO and Vice President, Amazon
Structure 2010: Werner Vogels – CTO and Vice President, Amazon

AWS has a huge head start and lots of customers. But we’re early in the cloud era. IDC says less than 5 percent of the world’s total IT budget is now devoted to public or private cloud. That leaves a lot of upside for Amazon and its competitors.

There’s time for Amazon to offer more hybrid options and for rivals to catch up. It’ll nothing if not an interesting market over the next few years.

Who wants to bet that this topic of hybrid vs. public cloud deployment will come up at Structure 2013 next month where both Moorman and Amazon CTO Werner Vogels will take the stage?

Pretty safe money, I’d say.

3 Responses to “How Amazon’s cloud competitors are trying to find cracks in AWS’s armor”

  1. This is an insightful article that complements the “Intel Cloud Finder” advertising — just seems like the repetitive Intel ads seems to be the real focal point of this story.

    Wouldn’t it be more effective if Intel simply wrote an insightful editorial on the topic of cloud computing innovation? This page on GigaOm is a case study of how traditional marketers, like Intel, really need to focus more on their thoughtful content marketing efforts.

  2. There is a big gap in Amazon’s offering that this article doesn’t mention: Its lack of IPv6 support for much of its AWS/EC2 offerings. Google missed an opportunity by not coming out of the gate with robust IPv6 support for Compute. Many companies that would like to support IPv6 today blame their limitations on Amazon, because the best you can do today is to put up an IPv6 address on ELB. The first company to have a comparable offering but better IPv6 support is likely to be attractive as IPv6 becomes more important.

    • IPv6 is not used much in the US. Especially enterprises do have a strong case to require IPv6 in their VPC. Even if they use IPv6 inside the enterprise there are ways to work with a non-native-IPv6 VPC. This could be more of a requirement in Asian countries.