Around this time last year, I was listening to network operators distance themselves from Amazon's cloud service suite, Amazon Web Services (AWS). They were scandalized by the suggestion that the carrier cloud might be competing with AWS. They insisted Amazon was not the yardstick against which they measured themselves. "Vanilla" cloud, one carrier called it.
Even the phrase "public cloud" became a dirty word -- a euphemism some carriers used to paint Amazon's cloud as low-end, unsafe or unsanitary. Like a public pool in a poor neighborhood.
Of course, these were the remarks carriers had made to me -- a journalist. So when I heard some of the more candid comments from providers at the Carrier Cloud Forum, a workshop colocated in the Interop 2012 trade show in New York this month, I noticed something: They were suddenly a lot more ambivalent about Amazon.
During a panel discussion about standards for building a "trusted cloud," panelist Peder Ulander, vice president of product marketing at Citrix Systems Inc., addressed a question from an audience member who worked for Verizon. The attendee asked the panel to comment on the differences between customer expectations of providers like Amazon or Google, versus their expectations of a carrier like Verizon.
Carriers like Verizon deal directly with C-level executives, and their customers already have high expectations about how carriers engage with them and about the level of service they expect, Ulander said.
"To some, that's a little bit of a shackle because Amazon comes in, and who are they? They're a book reseller, and they're going to provide all this stuff to your end users [via] a credit card, [and these customers] really don't have the risk assessment, care about the SLAs or any of the other stuff."
Amazon is an incredibly sophisticated competitor. Their list of customers is incredible … [and] we're way behind. Somebody needs to stand up and say that.
Ulander also discussed how Netflix, an Amazon customer, uses its cloud-testing Chaos Monkey application with the understanding that cloud may fail. At this point, another member of the audience, who only identified himself as an AT&T employee, took issue with what he apparently perceived as flip remarks on Amazon's competitive presence in the market. Writing off Amazon as just a "bookseller" isn't helping carriers, he said, noting that Amazon is ahead in the market and carriers must recognize that.
"Amazon is an incredibly sophisticated competitor. Their list of customers is incredible," the AT&T employee said. "In a general way, we're way behind. Somebody needs to stand up and say that. And this idea of [carriers having] the network and a couple of APIs, ehh, that's nice, but there's a reason why [providers like Amazon] are ahead."
In a separate session discussing the carrier cloud, another cloud provider attendee showed some concern about the challenge Amazon poses in terms of pricing.
"Amazon has reduced their prices 11 times in the last year," said the man, who did not identify himself or his company. "In my view, that's the issue here. If you go to say, 'Mine's better … but it costs 40% more,' then [our customers] say, 'Thank you very much' and move over to Amazon."
'Amazon is closer to a carrier cloud'
No, I'm not saying the carriers are scared of Amazon; many are still confident that they can bring more value to the cloud. They have the network, the security expertise and the background in professional services, and they deeply understand enterprise IT requirements. Many are also looking at higher-layer services that can be more profitable than Infrastructure as a Service (IaaS). They have brand recognition and reputations as premium, enterprise-class providers.
But here's the rub: Amazon is starting to do many of these things too, and carriers are recognizing it. Jeff Deacon, chief cloud strategist at Miami-based Terremark Inc., didn't portray Amazon as a threat, but he did acknowledge AWS is becoming a more sophisticated operation.
"Amazon is closer to a carrier cloud," Deacon said during the question-and-answer portion of his keynote address at the Carrier Cloud Forum. "When I think of Google, I think Platform as a Service. When I think of Amazon, I think of Infrastructure as a Service but with some of their other offerings -- like Database as a Service [and] Beanstalk -- they're definitely moving higher up the stack."
Steve Schmidt, chief information security officer at AWS, dug into Amazon's various security strategies during one of the general Interop keynote addresses. Speaking to enterprise IT pros, Schmidt also belabored the point that with customers like Netflix running its core application in AWS, the Amazon cloud is no longer just a place for low-stakes test and development usage.
These were very deliberate choices of speakers and themes. Amazon has been hammered about cloud security for years, and several of its high-profile outages have chipped away at customer confidence. Next month, it's also having its first global customer and partner conference, AWS re: Invent.
Amazon may never catch up to carriers in terms of building an enterprise-class cloud, and it may be years before both parties start angling for the same types of customers. But AWS won't be a distant competitor forever, which means carriers shouldn't lose sight of it in their rearview mirrors.
Jessica Scarpati is the site editor of SearchCloudProvider.com. Share your thoughts on this column via email or by commenting below.
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How big a threat is Amazon Web Services to carriers?
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