The Effect of Cloud Computing on Growth of

Startups and Entrepreneurship

(Case Review: Amazon AWS)

By Sohail AbasiFounder of www.khoshfekri.com@SohailAbasi

The Idea

• Use your existing data center to provide cloud services

Why it is a good idea?

• Make a lot of money• offer services much cheaper than medium-size

company and still make profit• Leverage existing investment• New revenue stream at low incremental cost

(example: many Amazon AWS technologies were initially developed for Amazon's internal operations)

• Defend a franchise (Example: Microsoft enterprise apps Microsoft Azure)

The pioneers• Jul 2002: Amazon Web Services launched

– Third-party sites can search and display products from Amazon's web site, add items to Amazon shopping carts

– Available through XML and SOAP• Mar 2006: Amazon S3 launched

– Innovative 'pay-per-use' pricing model, which is now the standard in cloud computing

– Cheaper than many small/medium storage solutions: $0.15/GB/month of storage, $0.20/GB/month for traffic

– Amazon no longer a pure retailer, entering technology space• Aug 2006: EC2 launched

– Core computing infrastructure becomes available

Wide-spread adoption

• Apr 2008: Google App Engine launched– Same building blocks Google uses for its own

applications: Bigtable and GFS for storage, automatic scaling and load balancing, ...

• Nov 2009: Windows Azure Beta launched– Becomes generally available in 21 countries in Feb

2010

New World of IT

Old World• High Cap Ex (Capital

Expenditure)• Charge as much as you

can• Guess on Capacity

Needs

New World• Low variable Expenses• Only pay for what you

use• Scale seamlessly up,

Shed capacity as you wish

Predicting infrastructure need is difficultC

om

pu

te P

ow

er

Time

Predicted Usage

Actual Usage

Waste

CustomerDissatisfaction

The two prediction problems

Example: Video App on Amazon EC2N

um

be

r o

f E

C2

Inst

an

ces

Launch of a Facebook modification

Scaled to peak of 5,000 instances in 3 days

Old World• Need a new server?

See you in 2 or 3 months!• Undifferentiated Heavy Lifting

(Spend lots of time of exterior stuffs:– Coordinating large teams– Legacy software– Heterogeneous hardware– Scaling and managing physical

growth– Moving facilities– Purchase decisions– Bandwidth management– Contract negotiation– Server hosting

New World• Need a new server?

Spin up hundreds, even thousands of servers in minutes

• Focus scarce engineering resources on Agency mission

?How did Amazon get into Cloud

Computing?

How did Amazon get into Cloud Computing?

• Working on it for over a decade

• Development of a platform to enable sellers on the Amazon global infrastructure

• Internal need for centralized, scalable deployment environment for applications

• Developers were hungry for more

7 Reasons for Startups to use AWS

1. Zero upfront costs. No admin.

• Without a big investment in cash, or time• Pay-as-you-go, zero admin services.

2. From your initial customer to your initial public offering.

• Launching is fast and simple with AWS• Infrastructure will grow with your business

3. Lightning fast web content.

• Amazon CloudFront is a global content delivery network

4. Stay lean as you grow.

• Extend your runway by driving down your AWS infrastructure costs.

• Scale based on demand

5. Global by default.

• Global expansion doesn’t require a global workforce.

• multiple datacenters in multiple geographic regions

Evolving AWS Worldwide Infrastructure

Amazon Edge Locations (CloudFront & Route 53)

US West(Northern California)

US East(Northern Virginia)

Europe West(Dublin)

Asia Pacific Region

(Singapore)

Hong KongTokyoSingapore

Ashburn, VA Dallas Los AngelesMiamiNewarkNew YorkPalo AltoSeattleSt. Louis

AmsterdamDublinFrankfurt LondonParisStockholm

AWS Regions

Asia Pacific Region(Tokyo)

6. Bring your own app.

• Build with the tools you know. • HTML5 mobile apps, to Django-driven social

networks• Technology choices which best suit your

business• Flexibility to change your mind.

7. Scale up. Scale fast.

• Build architectures from day one that will scale up automatically with your business.

23

What is Amazon AWS?• Different services:

– Amazon Elastic Compute Cloud (EC2)Virtual machines for running custom software

– Amazon Simple Storage Service (S3)Simple key-value store, accessible as a web service

– Amazon SimpleDBSimple distributed database

– Amazon CloudFrontContent delivery network

– ...

AWS Platform

AWS Global Physical Infrastructure (Geographical Regions, Availability Zones, Points of Presence)

Your Application

ComputeAmazon EC2

StorageAmazon S3

Amazon EBS

DatabaseAmazon RDS

Amazon SimpleDB

Identity & BillingAWS IAM

Identity FederaltionConsolidated　 Billing

MonitoringAmazon CloudWatch

Auto Scale Network ＆ RoutingAmazon VPC

Amazon Elasti c LBAmazon Route 53

Direct Connect

Content DeliveryAmazon

CloudFront

EmailAmazon SES

Parallel Processing

Elastic MapReduce

Messaging Amazon SNS

Amazon SQS

WorkforceAmazon

Mechanical　 Turk

Libraries & SDKs.NET/Java etc.

IDE Plug-InsAWS for Eclipse

Deployment & AutomationAWS Elastic BeanstalkAWS CloudFormation

Web InterfaceManagement Console

University of Pennsylvania 26

What is Amazon EC2?

• Infrastructure-as-a-Service (IaaS)– You can rent various types of virtual machines by

the hour– In your VMs, you can run your own

(Linux/Windows) programs• Examples: Web server, search engine, movie

renderer, ...

http:

//aw

s.am

azon

.com

/ec2

/#pr

icin

g (9

/11/

2013

)

The AWS management console

• Used to control many AWS services:– For example, start/stop EC2 instances, create S3 buckets...

CloudFront

• Content distribution network– Caches S3 content at edge locations for low-latency delivery– Some similarities to other CDNs like Akamai, Limelight, ...

AWS GovCloud (US)

Mars Exploration Rovers

Mars Science Laboratory

Deep Space Network

Carbon in the Arctic Reservoir Vulnerability Experiment

Lunar Mapper Mission Project

ATHLETE Robot

Demo

• Logging into AWS Management Console• Launching an instance• Contacting the instance via ssh• Terminating an instance

Cloud سرویسو تاثیر آن بر رشد استارتاپ ها و

کارآفرینی

شرکت AWS )بررسی موردی: آمازون)

سهیل عباسی@SohailAbasi