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Fintech Act. 21 Aug 2017

Case Study: Amazon Web Services reigns in the Cloud world

How the combination of EC2 and S3, cloud computing and storage from the giant Jeff Bezos, has revolutionized the technological and business world.

The total figures from Amazon are enough to make your head spin (with a turnover of $88.988 billion in 2014), although information from the IT services in the cloud is one of the secrets that they haven't revealed. We still haven't seen any information published, but the U.S. giant has promised to provide figures this quarter, and what does seem clear is that Amazon Web Service (AWS) reigns at present in the world of the cloud.

In 2002, a plane landed in Seattle. The plane was boarded by the funder of O'Reilly Media, Tim O'Reilly, who, despite having started a dispute a few years ago due to the 'one click’ patents with Jeff Bezos, wanted to meet with the founder of Amazon to convince him to unveil the Amazon.com sales information. This means that since the editors know the market trends and what people like, they can decide what to publish or what to put to one side, and find out in which direction the market is going.

In this meeting, Bezos couldn't see how Amazon could benefit from sharing this information with third parties. According to the book The Everything Store: Jeff Bezos and the Age of Amazon, O’Reilly stated that: “Companies shouldn't just think about what technology gives them, but rather what they can give to others”.

Summarizing his words, the Irishman showed the founder of Amazon what they have managed to achieve with their technology: the software known as Amarank allows them to "scrape the surface" of the sales information on the Amazon.com website. He suggested that they develop the API (Application Programming Interfaces) tools. The APIs enable developers to create specific systems for operating systems, simplifying the work of a programmer, as they don't have to write codes from scratch, and they enable the IT programmer to use functions to interact with the operating system and with other programs.

These interfaces enable third parties to gather information on the products and prices and rate sales. O'Reilly convinced Bezos to leave parts of the website accessible and allow other websites to develop services on top of them. By sharing the information, Amazon encourages hundreds of programmers, which in turn creates an internal work group within the company: Amazon Web Services.

The company was launched in 2006, and almost 10 years later, what began as an experiment has managed to get its claws into the largest section of the cloud, with a value of around $155 billion, according to data from Gartner consulting. AWS doesn't publish figures regarding its profit, but it has a million clients in 190 countries thanks to the 28 data processing centers distributed throughout 11 regions.

How it works

The Amazon Web Services are cloud computing services. Companies save on infrastructure and pay for what they use. AWS rents IT power by the hour and stores data by gigabytes:

the-aws-services-bbva

BBVA Innovation Center

Amazon was here first and they set the trends. It offers an environment to hire virtual machines, for both small companies or individuals and for intensive computing", said Ignacio Blanquer, professor of the Information Systems Department at the Technical University of Valencia and member of the Institute for the Research of Molecular Imaging Instrumentation.

Blanquer has used AWS services for his genetic analysis studies. "We use the machine with genome assembly applications", said the professor, which leads to cost reductions thanks to cloud computing: "The resources are increased based on the workload, so as the quality remains the same. If there is a peak, the number of servers is increased, and vice versa. It also enables us to store a huge amount of data". Blanquer pointed out that the data "is controversial".

According to the professor, it violates the laws of many countries by using the public cloud. In the case of medical information, which is the main target of the cloud, certain conditions have to be guaranteed which still don't exist and which are under study". Another fear "is that the company shuts down and the user loses their information", he points out. The latter doesn't seem to be a threat for AWS, whose combination of EC2 and S3, cloud computing and storage, has revolutionized the technological and business world.

Companies and start-ups don't have to bankrupt themselves or waste money by buying materials or hiring engineers. The threats for the Seattle giant come from Microsoft, Google and IBM, which are putting all their effort into focusing on a market they have arrived late for, but with a goal of standing up to Bezos.

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