In my earlier column I raised the question of whether AWS would expand into the traditional enterprise computing area. This week’s announcements at the AWS Summit in San Francisco answered that question with an emphatic “Yes!” And IBM, EMC and HP will have to up their game to hold onto their market.

First AWS announced dramatic price cuts in its services across the board in what SiliconANGLE CIO and host of theCUBE John Furrier called “price cutting-as-a-service” in the AWS Summit CrowdChat.  It cut the price of Amazon S3 by an average of 51 percent with tier pricing falling 36 percent to 65 percent. It reduced Amazon EC2 by 30 percent to 38 percent for new generation (M3 and C3) instances and 10 percent to 40 percent for previous generation (M1, M2, C1) instances. It reduced the price of Amazon RDS by an average of 28 percent and the price of Amazon ElastiCache by an average 34 percent. It reduced the cost of EMR by 27 percent-61 percent for On Demand instances and added five new instance types. These prices go into effect April 1.

It is tempting to see these as a response to the recent price cuts announced by Google Compute Engine. However, AWS sees its competition in the enterprise market as internal IT, not Google or IBM, and this dramatic repricing is aimed at making AWS less expensive than running compute loads in-house. In part that can be seen as a defensive move to keep its existing users, some of whom have moved off AWS over pricing. While it should accomplish that, it also positions the service for an assault on the enterprise market, where CIO budgets are constantly being squeezed. If it is less expensive to run on AWS, then CIOs have to have specific reasons to keep their main compute loads in-house.

Also, as Jason Stowe of Cycle Computing said in his interview in theCUBE, “As AWS keeps dropping prices it will make more uses cases…practical.”

Jason Stow of Cycle Computing

New services

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Second, AWS announced a set of new services. Of particular interest is the roll-out of Amazon WorkSpaces, a fully managed virtualized desktop computing service in the cloud. This is Amazon’s answer to VDI, allowing subscribers to access their full desktop from virtually any device – laptops, iPads, Kindle Fire, Windows 8, and Android handhelds – anywhere where they can access the Internet. WorkSpaces is available across North America now and will be rolled out in the other AWS regions worldwide over a presumably short time.

It also announced VPC peering between Virtual Private Clouds (VPCs) in the same AWS region. This allows Amazon Elastic Compute Cloud (EC2) instances in the peered VPCs to communication with each other using their private IP addresses. A VPC can have peering connection with as many as 50 other VPCs in the same region.

Infor’s big news

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The most significant new service announcement, however, came from Infor, a major enterprise software provider whose products include enterprise asset management, enterprise resource planning, CRM, and product lifecycle management. It announced SaaS versions of its core product suite running on AWS. In an interview in theCUBE just after making the announcement (see embedded video below), Infor COO Pam Murphy said it is getting strong interest both from established Infor customers and new prospects. Customers, she said, are very interested in moving core compute loads to the cloud.

This is a full endorsement of AWS as a platform, not just for development or non-essential applications but for core traditional enterprise applications such as enterprise performance management, supply chain management, and financial management. Infor is staking a big part of its future on AWS as a platform that will deliver the service levels its customers require. Admittedly these are not customer-facing applications, nor do they require absolute instantaneous response times. Companies will not stop operating if their supply chain management system runs a few minutes slow occasionally. But no CIO would want her company’s financial management to crash, on the other hand, and Infor is basically promising to its clients that those systems will run at acceptable service levels 24X7X365 on AWS.

And Infor is no small company. Its clients include more than 600 medium-to-large corporations, and has been named a leader in the Gartner Magic Quadrant for corporate management software. So it brings connections into many important potential enterprise customers to AWS, the kinds of connections that IBM and HP have in this market. This plus the price reductions makes a potent combination that will bring AWS directly into the heart of the enterprise services market.

Infor’s Pam Murphy

HPC on AWS

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The frosting on this cake came in theCUBE interview with Jason Stowe of Cycle Computing (see embedded video above).  Cycle provides high performance computing-as-a-service, on demand, on AWS. Its original clients were university researchers and other traditional HPC users, but Stowe said that Cycle is seeing increasing business from corporations who want to do specific research in connection with product development, market analysis, and other business needs. They find Cycle’s service compelling because they can dial up the compute power they need to do their analysis, and when it is done they shut it back down. That is much less expensive and more flexible for them than building an in-house HPC capacity, which then may not always fit their needs and will probably spend a lot of its lifetime underutilized. This however is another way in which enterprises are developing experience with AWS.

These and other announcements and interviews on theCUBE from the Summit make AWS’s market direction clear. It is making a major push into the enterprise market this year and beyond, and it is coming with a strong package. CIOs should pay attention. AWS is definitely going to be the low-price provider of quality cloud business services that can deliver sufficient SLAs for many compute loads at less cost than providing them in-house for many companies. CIOs may not want to put customer-facing systems, or custom applications that provide the company with competitive advantage, on AWS. However, they certainly will want to look at AWS and the Google Compute Engine for running the background management workloads that make up a significant part of their overall infrastructure.

photo credit: jimflix! via photopin cc

WorkSpaces graphic courtesy Amazon.com