The Big Secret that Amazon doesn’t want you to know about AWS...

Image of a magnifying glass over the Amazon Web Services logo

Posted on Tuesday, January 26, 2016

When it comes to Cloud platforms, one provider stands head and shoulders above the competition – Amazon Web Services (AWS). Aside from having one of the most diverse offerings, Amazon’s killer feature is pricing which is amongst the lowest presently available. In fact, AWS has been a key player in the “race to zero” which cloud providers are currently engaged in. 

The chance to move from CAPEX to OPEX IT spending has been the deciding factor in cloud adoption for many organisations. Why buy additional storage hardware when another business will shoulder the burden for you? Especially if they then take responsibility for deploying, configuring, patching and managing each system as part of the subscription cost?

Amazon is trying to ignore a big problem

Surging demand for AWS services means that Amazon has had to invest heavily in infrastructure to meet it. But the on-demand model means they must also have enough redundant capacity to cope with peaks.

The depressed economy has actually helped AWS fund their expanding IT estate, using record-low interest loans to spread costs. But after the Federal Reserve raised rates in December, this model is in danger – particularly if rates rise again at some point in the near future.

AWS users could be in trouble

Should AWS costs increase, service users face two problems. Obviously a price hike is unwelcome and will force an increase in operating costs, but this is the smaller of the two problems.

The second issue is what happens when an organisation decides they can’t stomach the increase, and wants to move to a rival service? Without any cloud standards and hefty data transfer costs, the move elsewhere could be even more expensive.

The race to zero could actually become a form of vendor lock-in, with many businesses trapped long before they realize there is a problem. 

In which case they had better hope interest rates stay low for a long time to come.