Things to Consider Before Buying Amazon Web Services

Spend Matters welcomes another guest post from Kevin Davis of NPI, a spend management consultancy, focused on eliminating overspending on IT, telecom, and shipping.

Amazon’s unlikely, but meteoric, success in the IT industry is legendary. By now, most enterprises are aware of Amazon Web Services (AWS), the company’s most successful venture outside of retail. But few understand just how broad its capabilities are, and whether or not AWS is the best fit for their business.

As a wholesaler, AWS provides low-cost compute cycles from their cloud data centers. After more than a decade of building and running, they’ve amassed the capabilities to deliver massive scale technology infrastructure via the cloud. Today, AWS offers highly scalable, affordable IaaS solutions that can run entire enterprise IT operations (compute, networking, storage, database, application services, and management) – while reducing the hardware footprint for each of its customers. Since the first service launch in March 2006, the AWS platform is now the underlying infrastructure for businesses around the world – from start-ups to enterprises to government agencies.

When evaluating AWS, most enterprises find it easy to understand the “pros.” The vendor has more than five times the computing capacity than the combined total of the other 14 top providers in the market. With hundreds of thousands of customers in 190+ countries, and data centers around the world, AWS is used to running every possible IT scenario. Software giants like SAP, Oracle, Adobe, and Microsoft have all made their software available on AWS.

For most enterprises, AWS’s offerings make sense. But, as I’ve mentioned before, there are still several things to take into consideration before inking a deal: 

  • The learning curve for a software-defined data center is sometimes steep for larger enterprises.
  • Billing is extremely confusing; NPI recommends going through a reseller for a more detailed monthly bill.
  • AWS does not include enterprise-grade support by default. Customers will need to buy Business tier support for this, which carries up to a 10 percent premium on the customer's overall AWS spend.
  • Almost all enterprise customers require a custom agreement (vs. the click-through agreement online), and significant terms-and-conditions negotiation.
  • Have experienced high profile outages in recent history.

AWS has transformed the way companies use IT by making it easier than ever to achieve a high-performance, scalable infrastructure. But, buying and managing AWS’s offerings – like any IT purchase – has its fair share of complexity and pitfalls. This is especially true if you’re not one of the vendor’s largest customers, as some small and mid-size enterprises are unable to get the support and guidance of an AWS representative.

The solution? Take time to gather the insight needed to understand the contracting and negotiation challenges for your unique IT and business environment before you buy. This effort spent early in the purchasing process will help you get the most from your AWS investment now and the flexibility you need throughout your contract term.

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Voices (2)

  1. William Hayles:

    Nice article. Much like standard web hosting, the cloud market has come to be dominated by a few major players like AWS, and I think in the coming years, we’ll see a lot of the users of those services migrating to IaaS providers that can offer a more customized level of service and personal touch.

  2. Greg Boyle (Trend Micro):

    Using an AWS consulting partner who can design and customize a solution is also a good idea. Part and parcel of the due diligence should also include looking at the licensing and billing of the applications you plan to deploy on AWS.
    While the elasticity of AWS is great from a cost perspective as you only pay for the infrastructure you use each day, the cost of licensing the application stack (which is usually done with an annual payment) can not only be hard to manage but end up being very expensive.
    Take a look at software that runs in AWS that can be paid for on an hourly basis rather than an upfront annual fee as the server/instance may only be in use sporadically.

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