Big Data case presentation

Amazon Web
Services
Group 6
31-01-2018

Arpit Chugh 2016PGP073

Shanu Malik 2016PGP109
Siddharth Saxena 2016PGP179
Amit Dhiman 2016PGP009
Rohit P 2016PGP171
Nabin Banik 2016PGP162
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Overview of
AWS

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Amazon:
Background
Around 1998, allowed Added video downloads in
outside merchants to 2006,
operate virtual storefronts Launched digital music in
and provided e-commerce 2007 and
technology to other retailers Launched kindle in 2008

Launched the website in Continued to By October 2008, offered

1995, moved beyond
books with goal of turning
Amazon into mass
merchandiser in 1998
broaden its products in different retail
consumer product categories, operated in 7
line while adding countries and had 1.4 million
clothing line in 2002 active seller accounts
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AWS - Evolution
 Amazon started experimenting with Web
services in 2002 with its Associates group
 Hence, decided to release its product data in an
API form and let Associates use the information
as per their wish
 The results of this experiment were great for
Amazon:
• Developers were very excited that
Amazon opened part of its platform for
them and flocked in numbers
• Showed innovative thinking to
merchandise products and gave new
ideas to Amazon

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AWS - Evolution (Contd.)

Amazon realised that Internet could become OS if:

• Developers build applications using Web services and

• A broad array of Web services existed

Amazon had mastered a complex technology infrastructure necessary to run retail business at such
a big scale

Found that they were well equipped to expand their Web services leveraging their technology
strengths applied in retail business

They also leveraged relationships with software and hardware companies that they built over a
decade
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AWS - Where to Start? Requirements to meet

Used three mechanisms to determine where Services needed to meet a variety of

to start: requirements:

• Feedback from internal teams about • Reliability – Developers feel confident

reinventing applications
• Evaluated which Web services would be
needed to build these applications with help
of 25 business and technology leaders
• Feedback from external developers
suggesting the features they seek
• Scalability – Able to scale seamlessly
• Simplicity – Should be easy to use
• Low-latency – Should be fast enough
• Cost-effectiveness – To minimise
development costs

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AWS
Services

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Simple Storage
Services (S3)
Provided a basic interface for storing and retrieving the
data using the same technology that was created for
Amazon’s internal business.
 Secure:
Each object uploaded to S3 was replicated immediately
and multiple copies were stored in multiple locations
 Pricing:
$0.12 to $0.15 per gigabyte per month for storage
$0.10 per gigabyte of data uploaded
$0.10 to $0.17 per gigabyte of data downloaded
 Customers:
SmugMug: Used S3 to backup stored images of users
Microsoft: Used S3 to distribute copies of Vista software
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S3- Benefits

Most Comprehensive
Unmatched Durability,
Security &
Reliability, & Query in Place
Compliance
Scalability
Capabilities

Most Supported
Easy, Flexible Data
Flexible Management Platform with the
Transfer
Largest Ecosystem

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Elastic Compute
Cloud (EC2)
Web service that provided resizable computing capacity
in the cloud
 Highly Elastic:
Each object uploaded to S3 was replicated immediately
and multiple copies were stored in multiple locations
 Pricing:
$0.10 to $0.80 per instance hour
$0.10 per gigabyte of data uploaded
$0.10 to $0.17 per gigabyte of data downloaded
 Customers:
Powerset Inc: A natural language search company
AideRSS: A filtering tool for Internet news and blog
headlines
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Elastic Compute
Cloud (EC2) (Contd.)

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SimpleDB &
Simple Queue Service (SQS)
SimpleDB Simple Queue Service (SQS)
 Web service for providing real-time lookup and  A scalable, hosted queue that stored data
querying of structured data. messages as they traveled between
 Designed to work in conjunction with S3 and applications
EC2  Allowed developers to move data between
 Pricing: distributed application components performing
different tasks, without losing messages or
• $0.14 per Amazon SimpleDB machine hour requiring each component to always be
consumed available
• $0.10 per gigabyte of data transferred in  Created a place to store these messages for
• $0.10 to $0.17 per gigabyte of data transferred pick-up by the consuming components.
out  Pricing:
• Structured data storage was $1.50 per • $0.01 per 10,000 Amazon SQS requests sent
gigabyte per month

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Other Major
Services
 Amazon Flexible Payment Service (Amazon FPS)
• Designed specifically for developers to collect funds electronically from customers (like PayPal)
• Difference was that it was built ground up specifically for software developers. They had unmatched
flexibility in defining the conditions under which transactions could take place
 Amazon Premium Support
• Provided customers with one-on-one technical assistance for S3, EC2, and SQS
• Launched in two different plans: Gold and Silver
 Amazon Elastic Block Store (EBS)
• Provided block-level storage volumes for use with EC2
• When EC2 instances were terminated, the data within the instance was lost
• It allowed users to allocate storage volumes that persisted independently from EC2 instances

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Market Dynamics

1 Amazon was not expected to gain meaningful revenues from AWS in short- Expected digital
term, however, in long term it had bright prospects infrastructure
market size in 2009
2 IBM, Sun Microsystems and Hewlett-Packard dominated the traditional $225 billion
information technology infrastructure space
Key Industry Trends

3 However, only Sun offered a product similar to EC2, with variable pricing
(e.g., per hour) for processing power 5%
CAGR
4 Similarly in the storage market segment, there were very few competitors to
Amazon’s S3 offering Potential
There were few startups in early 2000s which offered similar data storage competitors
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services, but very few of them existed now
Google
The future of storage and computing as services was more bright in 2008 as eBay
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compared to 2002, when the concept was brought forward for the 1st time Yahoo!
Microsoft
rd
7 It was estimated that by 2012, more than 2/3 of clients would be paying for
storage as a service
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Competitors
Google
 In August 2006, Google began testing Google Apps for Your Domain. Google later added word processing,
spreadsheet and calendar services, and a Web page builder, all for a few dollars per person per month
 In April 2008, Google introduced App Engine, which allowed developers to build and host Web applications
on Google’s scalable infrastructure
 Prices of Google were at par with that of Amazon’s, however there was still scope of improvement
 Its capabilities were restricted to online Web applications, rather than offline batch computations and initial
version of App Engine only supported code written in Python
Salesforce Microsoft
 In 2005, it began offering on-demand customer  Windows Live provided a suite of consumer
relationship management (CRM) services and software services including an e-mail program,
created AppExchange, an online marketplace news headlines, blog and audio feeds, and a Web
where developers could swap and sell page builder.
applications.  In 2008, Microsoft acquired MobiComp, an open-
 In 2007, it announced the launch of force.com, a source cloud computing company that specialized
platform for developers to create business in the storage, backup, and restoration of mobile
applications on demand and without software. data
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Amazon’s edge
over others
 AWS services were well positioned in the market,
particularly with respect to ease of use, pricing, scalability,
performance, and the ability for developers to get up and
running quickly
 Amazon did not have a vested interest in how its
customers used its services because it did not provide
other software products or services for which there might
be risk of abandonment or cannibalization
 Amazon had an early mover advantage over the others
as it had learned a lot in past 2-3 years from customer
experience
 “A competitor-focused strategy is a reasonable one,
but it’s not Amazon’s strategy.”
– Amazon executive

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Challenges
for AWS

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Challenges for
AWS
 Pricing and Business Model
• Amazon have priced its offerings very aggressively as goal is to get many people on board as
soon as possible
• Unlike others, AWS didn’t impose any up-front fee and its pricing was exclusively based on
pay-per-use model
• It would take several years before AWS will become a meaningful, free-cash-flow-generating
business for Amazon
 New competing entities in market
• Both smaller ( DigitalOcean, niche in public cloud domain) and bigger players including IBM,
Oracle, Google Cloud Platform, Microsoft Azure are entering the cloud space

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Challenges for
AWS
 Capacity Management and Service Releases
• AWS wasn’t sure about the numbers of potential customers for this due to its streamlined
process
• This created uncertainties regarding capacity management initially
• AWS is continuously upgrading its capacity but even then, there has been some minor
setbacks resulting in temporary outage
• AWS allowed people to start seamlessly but need a lot of manual intervention to add and
scale capacity
• AWS platform offers very high scalability to its users and company is struggling to catch up
with its service’s increasing demand for capacity

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Challenges for
AWS
 Outside reaction to AWS
• AWS fare very favorably with startups and enterprises due to their cost effectiveness, which
also helps to promote AWS with viral marketing
• Reactions from press and Wall Street Analysts for AWS were mixed, as majority of analysts
covering Amazon’s stock considered this as diversion from company’s core activities
 Managing pace of evolving users expectations
• AWS users expect Amazon to continue to innovate as most of the user expect integration of
various components added and layered over the initial offering
• Event-driven automation, such as AWS Lambda, allows developers to run code without
provisioning servers where customers only pay for the service when functions executed

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Looking Ahead
 Amazon’s technological competence, ability to operate
reliable and scalable services cost-effectively, first
mover advantage in this nascent space, and ability to
execute quickly positioned splendidly
 AWS will continue to face competitive threats from
Google, Microsoft and IBM which are developing Web
service products directly comparable to those AWS
offers
 Microsoft and Google have existing working
relationships with large scale enterprises, while AWS
initial focus was on developers and startup
 Facing scrutiny from capital markets, AWS
acknowledged the need to broaden the mix of it’s
customer base

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Current figures

Public Cloud
services market
revenue
$260 billion

18%

YoY growth

Big Players

Amazon
Microsoft
Google
IBM
Salesforce

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Thank You!

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