Two announcements on the same day this week vividly illustrated the scalability and ubiquity of today’s Cloud Computing phenomenon. They also showed the diversity of users seeking to take advantage of Cloud Computing services.
The first was Amazon's (AMZN) announcement that it is offering a free usage tier of its Amazon S3, Amazon Elastic Block Store, Amazon Elastic Load Balancing, and AWS data transfer services for new users for a full year.
Amazon Web Services’ (AWS) innovative and groundbreaking approach to packaging, pricing and delivering computing power has been the primary impetus and standard bearer of the Cloud Computing movement. Its commodity and even spot-pricing techniques have captured the attention of entrepreneurs and enterprises alike.
UBS Securities estimates that Amazon will generate $500 million in 2010 and $750 million in 2011, making it the largest Cloud vendor by far with minimal marketing effort. Yet, this still only represents less than 3% of Amazon’s total revenues. But, Jeff Bezos is suggesting that AWS could generate as much revenue (and maybe more profits) than its e-commerce business. This is a major reason why Amazon has tripled its capital spending on infrastructure, and why it is attempting to eliminate any economic barriers to user adoption of its AWS capabilities by offering its services for free to encourage even greater growth of its Cloud Computing service business.
Verizon (VZ) also announced on the same day that it had won a portion of a major new contract issued by the General Services Administration (GSA) of the U.S. federal government aimed at migrating its operations to a private cloud environment.
Under this agreement, Verizon will provide cloud computing services – including server, network and storage capacity – to federal government agencies. The company will provide Infrastructure-as-a-Service (IaaS) capabilities and will help federal agencies meet their virtualization and data center consolidation requirements. The IaaS platform will consist of virtual and physical servers, storage services, backup services, and application support services to create a more responsive and cost-effective, on-demand computing environment.
Verizon was among eleven (11) awardees selected by the GSA to negotiate with government agencies and provide services under a blanket purchase agreement valued at $76.5 million over five years.
These announcements exemplify how rapidly the Cloud Computing movement is expanding.