Last week, embattled game maker Zynga announced $100 million in spending reductions. The hundreds of layoffs rightly garnered most of the headlines, but there was another important development as well – the company also said that it was abandoning the data centers on which it reportedly just spent $100 million to build. Zynga will return its infrastructure to the cloud.
It seems that after being a big Amazon Web Services customer for several years (running a reported 80% of its computing load), in 2012 the company made a "dramatic shift" from the public cloud to its own network, called zCloud. At the time, Allan Leinwand, Zynga's CTO for infrastructure, told PC World that AWS was like a four-door sedan, and that, "we love four-door sedans, but it's a car that's used for a lot of things – doing the shopping, moving the kids. I like to think of zCloud as the sports car built for the Le Mans of social gaming. It's tuned for the track." (Of course, the company still ran some workloads on AWS using a hybrid cloud model.)
At the time, the move was seen as a bellwether of what the cloud could and couldn't do for large users. Apparently, the environment has shifted.
On the conference call where the cuts were announced last week, Zynga CEO Mark Pincus reportedly told investors, "there's a lot of places that are not strategic for us to have scale and we think not appropriate, like running our own data centers. We're going to let Amazon do that."
I don't want to read too much into a single move by a flailing gaming company desperately searching for a sustainable business model in the unpredictable world of online gaming, but it's hard not to see this reversal as yet another powerful validation of the public cloud.
This is good news for Amazon, of course, because it not only regains a marquee customer, but it also shows that as the public cloud continues to grow more powerful and less expensive, even the largest users are finding it more economic than running their own data centers. And that even includes brand new ones with $100 million in recently sunk costs.
The message for enterprises, not just gaming companies, seems clear. No matter how invested you think you are in owning and running your own data centers, you can't afford not to look at the public cloud as the place not just for new workloads, but as a cheaper, easier, better replacement for existing infrastructure.