Interview: Amazon looks to bring the cloud to Australia

Amazon.com has today officially launched its Asia Pacific presence for cloud computing, choosing a group of data centres in Singapore to serve the region.

In this wide ranging interview with iTnews, Amazon senior vice president for web services Andy Jassy discussed future plans to bring the same service to Australia

iTnews: How will Australian organisations benefit from connecting to Amazon Web Services (AWS) in Singapore rather than the United States?

Andy Jassy, Amazon.

iTnews: How much of an improvement in latency should Australian customers expect?

AJ - You will see a similar latency [between Australia and Singapore] to what you would experience between the East and West coast of America. As you know, EC2 (elastic cloud compute) was only available to the East Coast of America for a very long time - but now most of our customers are on the West Coast, in the [San Francisco] Bay area. There are lots of workloads for which people are happy with that level of latency.

There were also some Australian customers that insisted that their data remain in the Asia Pacific region.

iTnews: In most of my discussions with customers - the issue isn't about whether the data is within the region or not. It's whether it's in the country.

AJ - Yes, for some, the data has to be in Australia. But there are a lot of workloads across all sectors of business that will be fine being in Singapore.

iTnews: Do you have plans to expand beyond Singapore?

AJ - We call Singapore our first AWS in Asia Pacific because others will follow. We had to pick a country to start because we couldn't do them all at once.  In the fullness of time we intend to have a number of countries. We are very interested in Australia - it has some very interesting businesses and we are very hopeful and optimistic about have a data centre presence in Australia in the near future.

iTnews: There is a level of comfort many IT managers take, knowing that their data is in a facility down the street, somewhere they can walk down and scream at somebody if things go wrong. How do you convince them to move to the public cloud?

AJ - It's a matter of ongoing education. We have operated cloud infrastructure for four years, and we're still learning a lot about the cloud.

There are two things enterprises must battle with. One is legacy - their existing kit is not built to leverage the cloud. Two is release of control. CIOs have important jobs, with thousands of applications under their purview. If there is an issue, it is comforting to know you can walk down the hall and take action. But what we're finding among CIOs is that more are realising the benefits of moving to the cloud are very compelling.

Cloud computing allows you to turn capital expenditure into a variable expense.  It means you can take those valuable software engineers away from managing infrastructure. It means you can apply those engineers to those products that differentiate you.

It allows organisations to move much more quickly. You ask somebody how long it takes to provision a server - sometimes its four weeks or four months. On AWS you can spin up thousands of instances in minutes. You can experiment more frequently. It's often said that innovation usually comes from being able to fail fast, to have lot of opportunities.

In terms of failures, you have to remember that if we have some level of operation problem, we have a significant problem. We have hundreds of thousands of customers relying on our services. We are more incentivised than any other company to fix an issue, because people aren't locked in to using us.

Due to our scale, we are able to pass on lower prices to customers. In most companies, they are only using 20 to 30 percent of their server capacity. In the cloud, we smooth out the peaks and troughs. We utilise infrastructure several orders of magnitude higher than any customer would. So we have a better profit structure, and we can pass on lower prices to customers.

iTnews: Microsoft Azure and Salesforce.com already have data centres offering cloud computing services out of Singapore. How do you intend to compete with them?

AJ - We've always believed there would be a lot of other player perusing this space.

First, what is different about what we do is that when we started this business seven years ago, we knew we were very good at running services deep in the stack, and very good at running reliable data centres that are scalable and cost-effective. And we are much better than that now than four years ago - there is an experience factor there.

Second, customers don't want us to choose which operating or development platform they should use. From the get-go we decided that, unlike some of our competitors, we support all the platforms.

iTnews: Is their still room for product innovation in the public cloud or have we made server computing a commodity?

AJ - I believe that in the fullness of time, companies won't want to own data centres. The small number that do will have a smaller footprint than they do today.

I do believe that this will be a high volume, low margin business. We came out of retail first, we understand that kind of business. But it will be interesting to see how many software companies, familiar with high margin businesses, will be comfortable to compete in such an environment.

In this environment, you think about costs and prices very differently.