Tuesday, December 18, 2007

Some more skepticism about Amazon WS as a business plan

I've been interested in Don McAskill's review of Amazon's SimpleDB in light of SmugMug's future plans. He is very positive that he can use this service for what it is intended for; infinitely scalable storage and retrieval of small, structured data sets. His post is a good one if you want to get a clearer idea of what you can and shouldn't do with SimpleDB.

However, I worry for Don. As a growing number of voices have been pointing out, committing your business growth to Amazon, especially as a startup, may not be a great thing. Kevin Burton, founder and CEO of spinn3r and Tailrank, notes that this depends on what your processing and bandwidth profiles are, but there are a large number of services that would do better to buy capacity from, say, a traditional managed hosting facility.

Burton uses the term "vendor lock-in" a few times, which certainly echos comments that Simon and I have been making recently. But Burton brings up an additional point about bandwidth costs that I think have to be carefully considered before you jump on the Amazon-as-professional-savior bandwagon. He notes that for his bandwidth intensive business, Amazon would cost 3X what it currently costs spinn3r to access the net.

Burton goes on to suggest an alternative that he would love to see happen: bare metal capacity as a service. Similar to managed hosting, the idea would be for the system vendors to lease systems for a cost somewhat above what it would take to buy the system, but broken down over 2-3 years. Since the credit worthiness of most startups is an issue, lease default concerns can be mitigated by keeping the systems on the vendor's premises. Failure to pay would result in blocked access to the systems, for both the customer and their customers.

I like this concept as a hybrid between the "cloud" concepts and traditional server ownership. Startups can get the capacity they need without committing capital that could be used to hire expertise instead. On the negative side, however, this does nothing to reduce operational costs at the server levels, other than eliminating rack/stack costs. And Burton says nothing about how such an operation would charge for bandwidth, one of his key concerns about Amazon.

There have been a few other voices that have countered Kevin, and I think they should definitely be heard as this debate grows. Jay at thecapacity points out the following:
[B]usiness necessitates an alternate reality and if expediency, simplicity and accuracy mean vendor constraint, so be it.
I agree with this, but I think that it is critical that businesses choose to be locked in with open eyes, and a "disaster recovery" plan should something go horribly wrong. Remember, it wasn't that long ago that Amazon lost a few servers accidentally.

(Jay seems to agree with this, as he ends his post with:
When companies talk about outsourcing these components, or letting a vendor’s software product dictate their business & IT processes… I always check to make sure my lightsaber is close.
This is in reference to Marc Hedlund's post, “Jedi’s build their own lightsabers”.)

Nitin Borwankar, a strong proponent of Amazon SimpleDB commented on Kevin's post that SimpleDB is a long tail play, and that the head of the data world would probably want to run on their own servers. This is an incredibly interesting statement, as it seems to suggest that even though SimpleDB scales almost infinitely from a technical perspective, it doesn't so much from a business prospective.

On a side note, its been a while since I spoke about complexity theory and computing, but let me just say that this tension between "Get'r done" and "ye kanna take our freedom!" is exactly the kind of tension what you want in a complex system. As long as utility/cloud computing stays at the phase change between these two needs, we will see fabulous innovation that allows computing technologies to remain a vibrant and ever innovating ecosphere.

I love it.

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