Amazon Cloud Services is starting to be noticed by the big boys. Amazon.com Inc, the e-commerce retail giant that is becoming a force in the booming business of cloud computing, even winning backing from America‘s top spy agency.
After years of being dismissed as a supplier of online computer services to startups and small businesses, Amazon Web Services (AWS) beat out International Business Machines this year to snag a $600 million contract with the Central Intelligence Agency
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IBM has successfully appealed its loss in the contest, stalling it for now. But the episode highlights how Amazon is evolving from an online retailer into a competitive provider of information technology and services to big companies, and government bodies.
That has helped push Amazon shares to a new record ahead of the company’s second-quarter results due on Thursday. Amazon doesn’t break out AWS results, but Wall Street believes it is expanding faster than the retail business and is more profitable.
Public cloud computing, which AWS pioneered in 2006, lets companies rent computing power, storage and other services from data centers shared with other customers – typically cheaper and more flexible than maintaining their own.
Amazon has begun to build a portfolio of significant clients, including Samsung, Pfizer, the Public Broadcasting Service and NASA, the U.S. space agency.
That unexpected threat is rippling through the sector. After two quarters of falling sales, Oracle announced partnerships in June with former foes Microsoft and Salesforce.com, a response in part to AWS’s expansion.
“AWS is having a really meaningful impact on IT and the big incumbent companies like IBM are reacting to that now,” said Colby Synesael, an analyst at Cowen & Co, who covers Rackspace Hosting, one of Amazon’s main rivals in the cloud.
by: Bahram Khandan
Security, Storage, Networking, Cloud