Would Amazon Web Services ever build an on-premise private cloud?

‘Never say never’, but it’s not in the cards, AWS VP says

Like some of its major competitors, would Amazon Web ever offer an on-premises private cloud management software?

AWS Vice President of Marketing Ariel Kelman wouldn’t rule it out - “never say never” he said - but he added that company executives have discussed doing it, but it just doesn’t fit AWS’s business model at this time.

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AWS is a services business that operates at massive scale. The company has a market-leading public IaaS platform with a plethora of web services that it updates and adds to all the time. The model of a fast-changing, constantly updating cloud doesn’t work very well in an on-premises private cloud model, Kelman said.

Nor do the economics work well for private clouds, AWS executives argue. AWS Senior Vice President Andy Jassy has preached for years about the advantages of the public cloud; it requires zero upfront cost to start using and is billed in a pay-as-you-go model. Private, on-premises clouds still usually require upfront investment and they will not scale to the massive level that AWS’s public cloud is able to.

Selling clouds that sit on customer’s own premises is a very different business model compared to what AWS does now. And the company has no intentions to get into it. “There are a lot of good tools” in the market to host private clouds, Kelman said during a one-on-one interview at the company’s re:Invent conference earlier this month.

AWS’s focus is to work with private clouds vendors to ensure compatibility between those private cloud software tools and AWS’s public cloud, Kelman said. AWS is taking steps to enable hybrid cloud computing in its own ways (read about those efforts here). Most of those efforts revolve around offering customers a “virtual private cloud” which uses virtualization technology to separate customer workloads. Customers can pay a premium to use dedicated infrastructure that is reserved for individual clients, but both of these options are still hosted in AWS’s public cloud.

It’s a very different strategy compared to what Microsoft, VMware and even companies like HP are taking in the cloud. All those vendors offer hybrid clouds that combine on-premises tools with a public cloud managed by the same software. Microsoft recently released an on-premises appliance that connects in with its public cloud, for example.

Enterprise Strategy Group researcher Mark Bowker says AWS has been doing more and more to make it easier for organizations to extend their existing IT environments into its public cloud. AWS released an Active Directory-compatible cloud-based Directory Service recently, and it offers plugins for VMware’s management tools, allowing customers to launch VMs in AWS’s cloud from VMware software. “They have lightly checked the box,” on providing hybrid capabilities, Bowker says.

But many customers he has spoken with have not been clamoring for an on-prem private cloud from AWS. AWS is seen as the best-in-class public cloud for new workloads, test, development, backup and recovery. A single management portal that allows workloads to be seamlessly migrated between public and on-premise environments sounds nice, but it’s much easier said than done.

AWS is playing the long-term game here. Jassy says that “in the fullness of time” the company believes most all business applications will be running in the public cloud. Instead of offering customers a private, on-premises cloud, the company seems intent doing all it can to host as many workloads as it can in its public cloud.

Copyright © 2014 IDG Communications, Inc.

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