All rights: MEGWARE Computer

Amazon Web Services (AWS) is back in town and bigger than ever! AWS had its annual New York City conference at Jacob Javits center to celebrate its continuing growth and introduce new data management tools. The AWS value proposal is very simple, move your data storage into the cloud and AWS provides the data storage and CPU cycles you need to house and run your data. AWS can replace your server room, at a lower price, with more up-time, higher speed, and better security while providing you with advanced tools to turn data into business predictions. This could be the greatest corporate freebie you’ll see this decade! If you think that’s an over statement, or AWS doesn’t apply to your corporation, then join me as we take a look at how the world’s largest provider of cloud storage is revolutionizing how corporations manage data.

Big corporations manage a vast number of document and huge databases. This data all needs to be stored… somewhere. In the past, that somewhere was the corporate server room. The server room evolved into large server farms that contain whole fleets of Windows, Unix and other servers that support the many different programming languages that your firm needs to operate. Managing server farms and interpreting data retention and security rules is a necessary IT function, but that function does not need to be managed from inside the corporation. When a major data breach occurs, or data is irretrievable, or an audit that must be immediately addressed, it’s not unusual for corporations to hire experts to ensure that these problems are resolved. Why not expand that approach and transfer your data problems to experts that can design and execute the best solution for your needs. That’s what AWS is proposing.

COST: Data storage and CPU cycles should be the cheapest commodities on earth. And they are, for consumers. Yet, for corporations the cost of managing these commodities have become prohibitive. Between 1990 and 2010 the cost of a Gigabyte of storage dropped from $100,000.00 to $0.10. However, this million fold drop in cost is not reflected in the cost of compensation, even though corporate IT has spent heavily in automation and remote maintenance products. Increasingly, compensation has become the dominant cost of data management.

Should support costs drop as quickly as equipment costs? For a comparison, look at your corporate desk phone and your personal mobile phone.  Over the last 20 years, the cost of a desk phone has remained largely the same, and the feature set only added voice mail and a small LCD screen to manage phone features. Your cell phone has dropped dramatically in price and added GPS, Skype, cameras, scanning, OCR, text translation, voice commands, internet access, streaming video and the convenience of a “computer in your pocket”. Consumer services need to answer to many customers, and ALWAYS evolve faster than corporate services. It no longer makes sense for IT to devote management time and money to overseeing a resource of ever declining value, and rising financial constraints?

A recent survey of over 1,000 IT professionals identified the challenges in data storage, and the number one pain point was… Managing Storage Growth. Other pain points included: designing and deploying solutions (backup, recovery, archive) and making strategic/big picture decisions. The corporate world has a huge hunger for data storage and processing. Database mining requires ever more CPU cycles, but it may not need them all the time. The ability to scale capacity up and down rarely works well within  IT, where unused resources are ultimately billed back to IT, which is left to explain cost over runs to senior management. These pain points are not going to go away until a radical new solution is deployed. The cost of storing a gigabyte is fast approaching zero, and the business needs greater flexibility to be competitive. Why not eliminate all of these pain points by moving to AWS or a similar solution?

RISKS: If all of the old issues were not enough, new threats just keep coming! Cybercrime has grown from a rarity to a daily war against anonymous hackers who test your firewalls every day. Your IT department must defend the corporation against international cyber criminals, and increasingly sophisticated attacks from government hackers in Iran, China and North Korea. Managing these threats has become a new money pit for Procurement and HR departments as they seek the equipment, software and personnel needed to defend your infrastructure. AWS, on the other hand, has: extensive reporting on security issues, state of the art firewalls, secure VPN, and full data encryption… for as much of your data as you want secured.

Too good to be true? It is… for corporate IT departments. Corporate IT has a massive disadvantage. IT needs to develop their own solutions to each and every new challenge. They need to identify new vendors, test their solutions and adopt these solutions to your environment. AWS constantly learns from their million plus corporate clients. Solutions for one client, can be applied to all clients. A clever security solution for the health industry, might benefit a finance industry client. AWS’ cost of development will always be lower per client, because it can be spread over so many more customers. For the same reason, AWS will also be able to install leading edge services earlier and with better results. A massive customer base delivers very tangible benefits.

MANAGEMENT: If you ask your IT department to add ten thousand gigabytes of storage, while also doubling the access speed of a key 25% of your data, you will first need to hold a series of meetings to estimation costs and agree to a schedule before you’re able to start the implementation. AWS has reduced this complexity to just two questions: how much space do you need and how fast do you want access speed to be? If you also have databases, there is a third question: “How much CPU power do you need.” These three questions are shown as sliders on your AWS management console. If you want more detailed cost implications, you can use the management console to run a simulation. Once you’re satisfied, just press “go”. That’s it.

When you want more space, it’s virtually instantaneous. Providing faster access means that somewhere within AWS, your data must be moved from lower speed devices (usually hard drives) to higher speed equipment (including solid state storage). The migration begins a few minutes after you hit go, and continues for minutes or hours until it is done. Because AWS storage is fully redundant, you don’t need to wait until a weekend to start a project. There is enough spare capacity in the system to start the move now, without violating performance SLA’s.

If AWS, and its competitors, provide such miraculous services, why haven’t all corporations already moved into the Cloud? Part of the reason is that there are so many tasks on IT’s plate that they don’t have time; so many projects are scheduled every year that a true game changers for cost moves to the bottom of the pile. IT departments rarely have the full cost of storage under one budget and so the magnitude of savings is not fully known. Also, few IT departments understand these services. Instead they remember less robust services from years ago. Finally, every IT department sees corporate security as a top priority that they fear outsourcing. However, AWS has security and management tools that are equal to the best corporate IT departments. And they have deployed data mining and management tools that most corporations are years away from deploying. How can you minimize resistance to change and reap the benefits of AWS?

While you can debate the virtues of Cloud services or the capabilities of your IT team to respond to new threats, it is not debatable that different data requires different levels of security. In a bank, customer data is of the highest importance and must be handled in accordance with both internal procedures and external regulations. In a law firm, documents containing confidential client data not only needs proper security, documents may also need to obey jurisdictional restrictions. Consulting, accounting, insurance and other financial firms will have other specific documents and data that require exceptional security. While each of these firms has unique security concerns, they also each have three categories of data that are good targets for migration to the Cloud.

• HR – Personnel Data: HR must protect employee information, especially medical data and personnel reviews. However, health care groups and personnel services have both chosen AWS, which speaks well for their ability to securely manage this type of data. The requirements of your HR department may have been addressed by other customers, and thees solutions can be applied to your data. Large firms also provide software to the general public, so that they can apply for new positions. This function should be at the top of HR’s priorities, yet a quick look shows many bugs and missing features in the recruitment sites of America’s largest employers. All of this data is important, but it rarely justifies the cost of your firm’s most secure (and expensive) data storage. HR could also benefit from AWS’ data mining tools, that could provide insights into future personnel needs.
• Procurement: Aside from any indirect insights derived from your contracts, little is in Procurement’s data that could lead to insider trading or a regulatory issue. The data risk is lower than managing than social security or account information. And this data already exists outside your firewalls, in emails and vendor databases. Moving Procurement data into AWS reduces costs, might significantly improve branch office performance, and unifies international data. AWS has invested heavily into machine readable language systems to mine vast reserves of data and convert them into future predictions. For example, it can read your contracts and documents to provide you with clues to future sourcing projects, and next year’s budget. That information can be used by your coverage teams to see if predicted RFP’s have been initiated.
• IT: IT manages a huge number of servers that contain customer data, but it also manages servers used only for development, testing and internal IT support. These servers are often “hand me down” equipment, which sometimes slows progress on projects. Servers that manage real customer data should be stored on the most secure servers, in the most appropriate locations. But in development, testing and all “pre-release” states, AWS is a better priced option with more than adequate security. When you separate out internal data from customer facing data, you may find that there are far more resources that can be outsourced, especially when the full personnel costs are accounted for.

AWS is the largest and most advanced cloud based data storage system in the world, with as much storage space as all of their competitors combined. You can use their existing services as configured, or they can build a custom solution that blends your network with their services. By leveraging their purchasing power and the scale of their operations, they can offer the same services that you receive from your IT department at a lower price, with more up-time, less waiting around to start projects and an unprecedented level of security. Even the CIA has entered into a $660 million, 10 year contract with AWS. If your firm migrates your data from internal IT to AWS you will deliver major cost savings, free up management resources and return IT’s focus to higher value projects. You might even deliver critical security roll-outs years ahead of schedule. If your IT budget needs relief and costs are rising… outsourcing your data storage to the Cloud might just be the solution you need. At least that’s my Niccolls worth for today!