Amazon’s New Store: Utility Computing.

AMAZON’S NEW STORE: UTILITY COMPUTING Name: Grade Course: Tutor’s Name: (07, October, 2010) Amazon’s New Store: Utility Computing Question 1 Amazon provides data storage services and provides computing tasks for its clients through the use of the Amazon’s servers. Amazon joined the cloud computing service provision through Amazon’s Simple Storage Service (S3) which offers data storage services and Elastic Compute Cloud (EC2) whereby the clients make use of Amazon’s servers. Amazon charges 15 cents per gigabyte for the data that is stored through the S3 services and 20 cents for any data that has been transferred. ES3 is used for businesses to back up their data. EC2 allows businesses to use Amazon’s servers for computing tasks such as software testing. Amazon charges are fair as they charge 10 cents for each instance-hour consumed and 20 cents per gigabyte traffic inbound and outbound (Laundon & Laundon, 2009). On top of this there are charges on storage using S3 services at the S3 service rates which are charged for storing Amazon Machine Image (AMI). AMI includes applications, libraries, data and configuration guidelines for the clients and which they use in running the processes. Advantages to Amazon The provision of the technology services is beneficial to Amazon as there are profits to be earned from them. The idea originated from the realisation that Amazon utilised a small percentage of the computing capacity, in addition to a strong and reliable information technology (IT) infrastructure. From this realisation, Amazon decided to open the system to the internet users and charging according to usage. The company is earning extra profits from the system that had already been created. Advantages to the clients The S3 system is a fast simple and affordable option for a business to store data. The availability is at 99.9 percent, thus making it reliable, dependable and scalable. The service does not require client software and no set up of extra hardware. This makes it convenient as the client will not need to worry about obsolescence of both the hardware and software. The client can conveniently store backup data using this service. The service enables businesses to use the already developed Amazon technology avoiding the mistakes Amazon made in the learning process. Creating a webscale would mean high investments in terms of money and time. The webscale development would take sometime trial period to develop to satisfaction. This would involve several corrections and adjustments of the systems. Using Amazon’s Web services has the advantage of using an already developed system which is easier and simpler to use than creating own webscale. Using Amazon’s web services will reduce salary costs for the business. The services are simple to use and anyone with basic computer knowledge can use them. It is therefore not necessary to employ network and system administrators. This is a saving to the business. Since the services do not need any additional hardware, the services are convenient because the business does not need to worry about replacing obsolete hardware or outdated software systems. There are a lot of other savings on cash expenditure and reduced risks had the business opted to develop its own web service and IT infrastructure. Amazon does not have a minimum fee charge or a start-up charge. To use the services one is only required to pay per usage. This means that the business will only pay for what it is using. The bigger the storage needs the higher the pay and the reverse is also true. This means that the business needs will be catered for without the need to plan or budget for the unpredictable growth of the business. Challenges The S3 and EC2 web services are an innovative idea by Amazon. However there is the possibility that big companies may join in the competition and offer these services but with the advantage of providing the computing services without the service level agreement, meaning that these competing companies will be earning benefits at the expense of Amazon’s. The viability of Amazon Web Services (AWS) is questionable. There is the possibility that the technology may not be popular with the targeted users as it is hoped for. The success history of Amazon technology services is mixed with success and failures and the viability of AWS is unpredictable. On the other hand if the technology becomes popular, it might overwhelm Amazon Web services which might lead to interruption of services for the businesses. This would result to the idea being dropped which would have a negative effect on Amazon.com entire business. Types of businesses favourable for AWS Amazon web services are likely to benefit small businesses which have a lot of data to save but who find it too expensive to invest in creating their own web services. There is however a risk in relying on Amazon web services as there is the risk of the Amazon servers business failing. This would mean that the business operations would be interrupted for this period of server failure. Amazon web services would be beneficial to those businesses that depend on contracts. The Pay-as-you-go services are preferable for businesses that need service contracts. This is because these businesses might need to store clients’ data on a temporary basis. The services will also benefit those businesses that are upgrading their own storage data systems or their own servers. The AWS will provide temporary services and these businesses will only have to pay for the data that they store and will stop paying as soon as their own systems are ready. AWS is favourable for those businesses with unpredictable rate of growth. These are mainly newly made companies with original ideas. These businesses cannot risk investing too highly on expensive IT syst...