The last few weeks of 2009 have proven to be quite productive, for cloud computing in general, and for Amazon specifically.  In general, many of the market players have made necessary acquisitions and/or partnerships this past year in order to further their cloud strategies.  Furthermore, organizations such as OCCI and Cloud Security Alliance are undertaking the necessary actions to overcome some of the challenges still facing this market.  All in all, while there is still a long way to go, it seems that the market overall, is headed in the right direction.

Amazon however, has been quite active, making a new announcement every other week, for the last couple of months.  In particular, these 2 announcements have been of interest to me, because they represent significant changes in the way enterprises will adopt cloud.  Below summarizes the two:

Virtual Private Cloud Opens Up:

While this has been in beta for some time now, it recently made it generally available to its EC2 customers.

In my first blog post:  “Private vs. Public Cloud:  Who Wins?” I referred to the seamless interoperability and integration of public and private cloud.  Virtual Private Cloud is in fact, the first step towards that nirvana, which will eventually lead us to the notion of intercloud, a concept in which data portability will be seamless and interoperability will be a reality amongst different cloud models, whether they are public, private, community, hybrid, and/or whatever other specialized cloud models may emerge.

When Amazon announced the beta, I was very excited.  It seemed as though they were finally getting an enterprise strategy in place, and listening to the needs of the enterprise customer.  Security and manageability are key elements where enterprises are concerned, and this was a step in the right direction.  So while they weren’t providing the security and management (or taking any responsibility for whatever happens within their environment), enterprises could extend their own security and management frameworks into Amazon’s cloud.   For a company who has limited to no experience in dealing with the enterprise customer, it was a significant move.

And then the second announcement…

Amazon EC2 Spot Instances…And Now How Much Would You Pay?

Spot instances, very generally speaking, are EC2 instances that can be bid on, at the price you are willing to pay.  This of course, depends on a number of factors (zone, type of instance, etc).  When Amazon has unused capacity available, it will then evaluate the open bids for each region and set the spot price for each instance type.  Any bids below the spot price will be terminated, and then launch instances for those at spot price or higher.  It will then be billed to customer at the spot price, regardless of bid.  More details can be read at @jeff barr ‘s AWS blog http://aws.typepad.com/aws/2009/12/ec2-spot-instances-and-now-how-much-would-you-pay.html

Many of my colleagues have been quite vocal about the fact that this is not pricing to the market, but simply Amazon setting its own prices.  That may very well be true (for now, but I do believe that is where they’re driving the market eventually), but what I find most intriguing is that Amazon has come to market with this pricing model, which no one has done before.  It speaks volumes about the great potential that Amazon has in changing the status quo of enterprise IT environments, business processes, organizational culture, and business models overall. 

It’s also intriguing because if it is anything like @swardley suggests, where he wouldn’t be surprised if Amazon “allows for reserved instances to be traded on its spot market, creating a sort of commodity exchange”, then spot instances would be the first step in truly commoditizing basic infrastructure.  While we are a long way from this scenario, it’s certainly not an impossible reality.

With this much potential in their hands, what is next for Amazon Web Services?  This past year has been a mish-mash of announcements in my opinion, with no clear direction of their enterprise strategy, if in fact enterprise is the target market, which, I do believe it is. 

There is no visible commitment from the overall Amazon organization, which is very evident in the way that AWS is reported (or not) in their earnings.  We have yet to see a true enterprise channel partner program, have seen little evidence in enterprises utilizing Amazon for mission critical applications, or have seen any kind of participation in standards initiatives.  Given their “leadership” status in this market, it would be characteristic of a leader to drive these initiatives, and not just become the de facto.

I am not one for predictions; I’ve gone back and forth on whether or not to post some of my thoughts around what will happen in 2010.  I’m still thinking about it. 

However, in the case of Amazon Web Services, I will predict this:  Amazon Web Services will be spun off from the overall Amazon Retail business, to run itself independently (although Amazon may retain a percentage), and will acquire its enterprise strategy.  It could be any number of vendors, but my gut instinct says it could very well be Citrix, an AWS partner already. Their strategy aligns well with AWS, and has an extensive channel partner program, customer installed base, security and management capabilities, etc.  An acquisition of this nature (Citrix or any other enterprise vendor), would instantly give AWS the credibility and validity it needs to go all the way in the enterprise.  It will continue to nurture the developer community it has catered to, and will offer solutions for both.  All will not happen in 2010, but the wheels will be put in motion next year, and this is how I predict it will play out.

What are your thoughts?  Assuming Amazon did go on an acquisition spree in 2010, whom would you consider (hypothetically) the best fit for AWS?