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A CEO’s Guide to Amazon Web Services

Author: Chuck Edwards | | April 30, 2010

What is Amazon Web Services?

Amazon Web Services (AWS) allows you to add and remove computing services on demand.  You pay for only what you use.  There are no contracts and no fees other than usage charges.  It works exactly like an electricity bill.  When you need more servers, you add them.  When you need more storage, you add it.  When you don’t need these things anymore, you simply remove them.

Why all the fuss?

Because of the cost and flexibility.  Small servers as as little as $0.03 per hour.  Consider the need for a few extra servers during a big project, like implementing an ERP system.  Servers may be added quickly and cheaply, then removed when they’re not needed.  The process of budgeting tens or hundreds of thousands of dollars for server capacity changes dramatically with AWS.

Does anyone important use AWS?

Besides themselves?  The biggest e-commerce site in the world?  Yes, there are literally thousands of companies using AWS today, and more every day.  Savvy start-ups are using AWS as their default computing platform.  Not just garage-based, bootstrapped organizations, but well-funded organizations that intend to go public.

Why would my business use AWS?

Dynamic scaling is one reason.  AWS computing capacity can be added dynamically, so when your product launch is featured on CNN and web traffic goes through the ceiling, your web site will not go down.  Outside of soemthing like AWS, you’d need to purchase and manage enough physical hardware to handle peak traffic that may be impossible to predict. Another reason might simply be projects.  Part of every IT budget includes some provision for test and development gear.  AWS is a fantastic substitute for expensive capital hardware because your IT department can simply use what they need for a project, then stop paying for them when they’re done.

How can savings be realized?

  • AWS may dramatically reduce capital expenditures and therefore depreciation hits to the bottom line.
  • Because AWS computing resources are managed by Amazon and not by an internal staff, there are no management or overhead costs to budget for.  The people, data centers, service contracts, 7×24 help desks, etc are all rolled into the hourly rates.
  • If your web site experiences downtime due to unpredictable load spikes, AWS may eliminate those problems, which both reduces maintenance overhead and keeps new customers on your site.

What about security?

With AWS, you are renting computing capacity, just like a dedicated hosting or managed hosting model, and security should always be a concern when you don’t have complete control.  AWS security risks are exactly the same as any third-part hosting provider.  That is to say, the risk itself is the same; how each provider addresses those risks should always be what separates one provider from another.  Amazon, produces a SAS70 audit so customers and customer auditors have a clear understanding of internal controls.  Amazon also has detailed technical security documentation that explains Amazon’s security practices far beyond ITIL processes.  As with any hosting provider, customers can mitigate risk by ensuring their security requirements match the provider’s documented controls and security practices.

I’m not technical and my CIO is anti-AWS.  How can I talk to them about AWS?

There are many legitimate reasons AWS is not a good fit for some IT shops, but such reasons should be based on fact and should be easy to communicate and document.  Hearsay or anecdotal “facts,” should never drive decisions.  AWS potentially represents substantial savings and increased IT agility for any organization, and should not be rejected out of hand.  If your CIO has no concrete, documented reason for rejecting AWS (i.e. they have neither explored nor tested the possibility) then you should ask them to.  IT is not a black box; every decision should and can have a concrete reason.  Make them prove it to you.

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