Cloud computing will continue melee in the next few years

On April 28, Amazon investors got big news: Wall Street's concerns were completely dispelled as earnings reports showed all first-quarter earnings and profit margins were well above analysts' estimates, Amazon shares soared 16% within a day on Friday under the single-day record of gains from October 2009 to the present day, which for Amazon itself means that its market value soared over the course of a single day Nearly 10 billion U.S. dollars. Now Amazon is no longer just a shopping site, it has become a collection of shopping, living, audio-visual, entertainment and other services in one of the Commonwealth, to meet people's basic consumer needs. But Amazon is more than just an e-commerce business. Accompanied by cloud computing service AWS, the e-commerce giant has become the leader in cloud computing.

As early as a year ago, a number of organizations expected the AWS cloud services business to become another $ 1 billion business in Amazon in 2012, but Amazon kept it tight and its earnings never disclosed the revenue of AWS. People do not It's clear that Amazon, a pioneer and forerunner, will benefit from geometry - one of the best weapons to respond to cloud suspicions. In response, Morgan Stanley earlier this month released a detailed analysis of Amazon's cost structure. The report estimates that AWS services generated Amazon revenues of US $ 1.9 billion in 2011 with a net profit of approximately US $ 108 million (~ 9%) , This figure is expected to double the previous expected revenue of 1 billion US dollars.

A recent study by DeepField Network Research Center found that Amazon's cloud computing has quietly evolved into a giant on the Internet and controls 1% of Internet traffic in North America and is already the fourth largest CDN in the world with millions of cloud computing users Nearly one-third use Amazon's cloud computing infrastructure to access websites daily. By now, the success of the "Amazon Empire" in the future has been the highest priority given the success of AWS in laying the leading position of public cloud computing in the world. However, the problem is that cloud computing is still in its infancy. As more and more IT and telecommunications giants and even governments pay more attention to cloud computing, how long can Amazon lead the way?

Amazon's transformation

We know that the concept of "cloud computing" is a factual one, with its own name. Before the concept of cloud computing was proposed, some internet giants have essentially deployed cloud computing systems within the company. The official proposal of the concept of cloud computing by the end of 2006, but because of the Google definition of the word can more vividly summarize the characteristics of this system of external services, it has been widely recognized, each quoted to "package" their own product services. From this perspective, Amazon is indeed the forerunner of cloud computing.

In 2006, Amazon introduced the Simple Storage Service (S3) for the first time. Like leasing redundant warehouse logistics capabilities to provide merchants with logistics services, cloud computing was originally designed to bring Amazon's unused IT equipment and computing power to life-as e-commerce user traffic is not evenly distributed around the world and does not have time So its IT infrastructure must be built to its peak sales to ensure a customer experience of peak shopping, but most of the time there will be some idleness of resources, so Amazon packages its technical advantages and the experience of running the Web site to others Business. By continually improving its services, it has become by far the largest cloud service provider. Amazon CTO Werner Vogels said that there are thousands of companies in the world who use AWS to run their businesses. According to Amazon, "they are located in 190 countries, that is, they are all distributed on Earth." Amazon Has become the actual cloud computing leader.

From now on, we know that this is the beginning of another great business for Amazon and an important guarantee for its win in the future. However, in the same year, cloud computing was still completely new. After all, the launch of AWS services was even earlier than Google put forward the concept by the end of 2006. So when the cloud computing business announced the loss of money, Amazon received Wall Street's "punishment." However Amazon CEO Jeff Bezos has always been a "long-term value theorist," and he repeatedly appealed to investors not to care about the company's gains and losses for several quarters. "We do not reject things that are misunderstood and then focus on doing what we're looking for and stick to our philosophy." We think it's all right from the customer's point of view. "The idea is a bit paranoid, but if it's a good idea Creative Value - Like the IT industry he has always stood in the way of questioning and aggressively invested, it is now one of Amazon's most valuable core competencies - in his opinion, Amazon's cloud computing service AWS is a The seeds of hope, and will grow into a giant tree, so can stand the wait.

While cloud computing concepts have not been so popular before, a metaphor for cloud computing and power grids has been widely used to popularize concepts: 100 years ago many factories also needed to set up their own power plants to use electricity when a dedicated grid was established After that, the factory can purchase electricity on demand and concentrate on the main business. In the current market landscape, only Amazon, the power company that played the Internet age in the first five years of cloud computing, was the Amazon - or in other words, a transition from Amazon to the future of technology.

Yes, Amazon has set off the transition, with Bezos trying to transform Amazon from a major online retailer to a technology service provider. In "Wall Street Language," Amazon is moving into more profitable services and moving from hosting websites to online buyers and sellers, so future profit margins will soar. According to Carlos Gilner, analyst at Bernstein Research, a U.S. market analysis agency, "These services are becoming increasingly important to Amazon's overall business role and will be the force driving future profitability."

This "Amazon model" is based on the reuse of its own resources on the basis of the service derived, it has also been widely supported by many traditional IDCs in China, including the most powerful and leading China Telecom

Temporarily lead

Amazon has already established its own advantage relatively firmly in the field of public cloud. Since its launch in 2006, AWS has maintained a high-speed rhythm of product research and development, in which the virtual computing-based EC2 has become the flagship cloud computing product. This corresponds to the alarming exponential growth rate of AWS. Data from Amazon shows that the volume of Amazon Cloud Services S3 has doubled in volume in 2011 to 500 billion, which is equivalent to an increase of 125 billion in each quarter. According to a report by the U.S. investigation firm 451Group, AWS has occupied 59% of the U.S. infrastructure and service (IaaS) market share, and the lead is quite clear. In addition to the proximity of their own resource attributes, this leadership is why Amazon's model is most widely interpreted and replicated in China.

In fact, more important than the platform itself, it has become a cornerstone of the entrepreneurial ecosystem. The explosion of cloud computing and mobile Internet is a major opportunity for science and technology and Internet companies in recent years. A large number of startup companies have been rapidly emerging. From the perspective of the United States, prosperity everywhere in Silicon Valley, New York, Boston and elsewhere is quite the scene when the first wave of the Internet wave broke out in the late 1990s. For the time being, Amazon's AWS cloud services, especially the EC2 hosted cloud services and S3 storage services, occupy a large part of this "incubator" role. According to Gartner, a market research firm, the days when startups "spend up to 80% of IT time and money in order to get the lights up" are over and AWS enables these smaller companies to focus on developing applications that meet their needs.

However, Amazon must begin to worry about the cloud security issues that the industry is very concerned about. In less than a year, AWS services suffered three large-scale downtime events: services were not functioning for days in April last year across the US East Coast; in August several European availability zones were threatened with power outages while Amazon Data Center in Dublin, Ireland, Declare Backup Generation Tool Does Not Work Normally; In January, Zappos, Amazon's e-commerce site, was the victim of yet another security accident - a flood of credit card information could leak. In addition to the reputation and credibility of the business greatly damaged, the accident also triggered a series of disputes and litigation.

On the other hand, the absolute superiority of IaaS market can not ensure Amazon's long-term leading position. After all, one-stop service is always attractive to users. And while IaaS is still considered a low-margin segment of IT services (though higher than Amazon's predecessor), PaaS and SaaS are a fertile ground for capital and profits, and Amazon wants to move into both areas Can be described as difficult. In this regard, while the AWS cloud platform is a leader in IaaS providers both in execution and in the forward-looking, there are still many more changes Amazon needs to make. The good news is that it is now not limited to the Infrastructure level, it is also expanding into PaaS, adding a lot of management and monitoring services.

To see this far more than Amazon. In fact, the vast market PaaS can see has gathered almost all IT and Internet giants. Google, Microsoft, VMware, IBM, Red Hat, Oracle, Saleforce, Rackstack, and others have all made substantial investments in PaaS, one after another cloud computing platform-level products. Amazon has been a bit late at PaaS as Amazon's biggest cloud computing player. Since late last year, we have seen AWS's development and application container Beanstalk, followed by the NoSQL database DynamoDB running on the cloud. In February, Amazon announced the Simple Workflow Service (SWF), which can be used to schedule distributed and fault-tolerant tasks in business process workflows.

In addition, Amazon's AWS is also developing products for enterprise cloud services in recent years. The full range of commercial products from IBM, Microsoft, Oracle, SAP and various open source products can be deployed on AWS cloud services. Last month, Amazon introduced the AWS Marketplace, an app store where Amazon is responsible for unified billing and user friendliness. From the feedback perspective, this move was supported by several IT giants such as IBM and Microsoft.

The industry has a saying: PaaS model is the future of cloud computing. Amazon's natural lack of SaaS capabilities (perhaps to try to better serve the main business AWS? Domestic Ali cloud proposed "Stone Tower" project may be some reference, after all, B2C to a certain extent, online business IT operation and maintenance The cost is also continuing), IaaS market leading enough to ensure its position in the field of cloud computing, then the space is broader and less mature PaaS naturally become a battleground, but now is not optimistic. From this perspective, Amazon's lead in cloud computing is only temporary.

The Future of "Amazon Model" and Reflection on China Telecom

Which phase of the development of cloud computing will determine how long Amazon can stay in the lead position. Of course, Amazon will not admit this, Bezos is making every effort to make AWS more influential. However, as cloud computing is increasingly being taken care of by countless technology giants and even governments of all countries, it is difficult for Amazon to maintain such a leading position - not to question the strength of Amazon or the courage of Bezos. It is in this extraordinary " War ", the Amazon model is difficult to win in the future.

First of all, as more and more countries upgrade cloud computing to the national strategic level, the cloud computing ecosystem dominated by IT enterprises is likely to undergo dramatic changes once again. When the administrative forces come out of trouble, whether it is Amazon or Microsoft, Google , IBM are standing at a starting line, and telecom operators with a certain background are likely to dominate the cloud computing standards in this case - administrative power is stronger than market forces, this is not impossible, especially in relation to national competition and In the area of ​​national security, cloud computing is very likely and is becoming an area like this.

From the perspective of the markets of China and the United States, telecom operators all have the tendency to move closer to IT companies, and have successively grabbed cloud computing standards and markets. Take China Telecom as an example. Its cloud computing strategy relies on its own advantageous resources and adopts the win-win cooperation mode it hopes to build an operator-led cloud computing platform. Developers and users are expected to gather here for the ultimate goal Is to promote the rapid development of cloud computing and China Telecom's strategic transformation. Of course, the three major telecom operators in China have a long way to go in IT. However, the wave of cloud computing may have a huge boost. This is the most important opportunity for Chinese enterprises such as China Telecom Opportunities are likely to build on the frustration of more people.

In fact, the U.S. government is intervening in cloud computing standards through a series of strategic announcements, executive appointments and service subscriptions. However, it cares is not to miss a possibility of national transformation, the technical direction of cloud computing, business innovation, standards and other professional content, the federal government did not intervene, but by the enterprises according to market demand for their own decision-making, which And many domestic governments led by the establishment of all kinds of "cloud base" is completely different.

Second, the Amazon model of cloud computing strategy has its inherent disadvantages, rely on the "rental IT resources" cloud computing business model, more like the feudal society has a lot of land owners - due to be able to achieve the rational use of existing resources, This model has obvious advantages in the early days, but can easily be defeated by more advanced models. From this point of view, China Telecom and many other IDC companies that started to take part in the cloud computing model went on to learn from the "Amazonian Model" that they could avail themselves of cloud computing by simply repackaging traditional server rental and hosting projects Big cake, this typical "Copy to China" approach is worth pondering. Perhaps in the occupation of the market after relying on its own resources advantages of China Telecom can go a broader road? We will wait and see.

Finally, many standards in cloud computing are not yet in place, and Amazon's leading-edge fait accompli still does not guarantee absolute speaking time at standard customization - it's easy to understand who is unwilling to be thrown into the cloud for the future Be the bottom of the food chain. In this regard, Amazon enjoys a certain degree of vested advantage because of its far-reaching IaaS share. In fact, at present, cloud computing has become one of the hot spots for standardization in the world. However, many standardization organizations cross and repeat each other. The cloud computing standard is still in the stage of draft planning. There is no unified cloud computing standard system in the world.

Predictably, cloud computing standards will remain a pending issue in a short period of time, and Amazon may not necessarily have a preemptive voice even in the current variety of APIs that are widely deployed on various cloud facilities and cloud platforms - - Its experience in this area lags far behind its competitors, after all, it is and will continue to be an online retailing based e-commerce company. In essence, the cloud computing itself is a more advanced computing model, economic model and the transformation of the relationship between production models, as who will represent the more advanced cloud computing model, the current is hard to determine.

From now on, there are several types of contenders in cloud computing: telcos, IT giants that provide data centers, chip and server companies, software platforms that provide platforms, and countless application-level companies. These types of enterprises cover all types of ecosystems and provide uncountable products and services that cover IaaS, PaaS and SaaS. Concepts are also emerging in an endless stream, and the competitive relationship between them is not distinct but complex, forming large, small and large Union - in the end who cloud computing will come to the fore to give practice to choose, this is exactly the era of melee before the birth of new civilization.

Since we are not willing and can not give up, then in the foreseeable future years, this chaotic competition will continue, but left for Amazon's lead time is running out; in the relatively backward level of information technology in China, this China Telecom under the model may be laughing a long time, but also only a few years left.