It’s amazing that I still hear companies say cloud computing is not part of their strategy or they can't run the risk of storing secure data in the cloud. It's kind of like saying they still work by candlelight despite the invention of the light bulb. It’s time to come out of the dark ages!
The attendance at last week's AWS Summit 2014 held in New York City may be an indication that the tide is finally turning. The event drew a record attendance and claimed to have more than 10,000 registrations. The attendees clogged registration lines to the point where they actually ran out of badges. Thousands of others also watched the event remotely in real time. Maybe this is all a sign that people are finally getting their heads out of the sand and into the cloud!
The Cloud is Here to Stay
Werner Vogels, CTO of Amazon Web Services (AWS), focused his keynote on the critical importance of agility for driving innovation and mitigating risks brought on by market uncertainties. These market forces drive the need for more flexible resource and innovation models that the cloud can help to easily achieve. His message was clear: cloud is here to stay and companies that leverage it have an opportunity to be leaders of their industry and outpace upstarts who are entering their markets.
And like any good product keynote speaker, Vogels also introduced several new product launches such as Amazon Zocalo (a Dropbox-like enterprise document and collaboration service), Amazon Cognito Mobile (which aids developers in providing identity and data synchronization across mobile devices) and Amazon CloudWatch Logs (a service that allows for real time, integrated EC2 logging and event notifications). AWS definitely knows how to keep invigorating and innovating its services.
Vogels pointed out that many of the new Internet start-up companies that are most disruptive to markets are businesses based purely in the cloud. It was amazing to hear just how many new-era companies have built their products from the ground-up using AWS services. And it was even more impressive to learn how many newly acquired clients are from established industries. The extensive sample list included companies like Smug Mug, Twilio, Sun Power, Comcast, Netflix, Pfizer, Vodafone, Unilever, Nasdaq, etc. The common theme centered not only on cost savings, but also on speed and the ability to give more focus to customer needs.
A Race to Innovate
One specific example was Airbnb. This popular couch-surfing and room-sharing site now arranges as many as 150,000 stays in Airbnb brokered rooms -- a metric most hotel chains would clamor for. In just one year, the company leapt from 4 million active users to 15 million as of January 2014. It uses more than 1300 AWS EC2 instances to run its platform. When asked why AWS, a company representative stated that it only has five operations people in IT! Everyone else is focused on the customer.
But it’s not just about the upstarts. Even the established companies are racing to understand how to become more agile and how to accelerate their innovation. If you want to increase innovation, you have to decrease the cost of failure. Having flexible IT resource models is critical to reducing failure. To gain more agility in a business, it is necessary to divert focus to building better products in a faster manner, rather than dealing solely with IT-related issues.
And the reality is that in this current big data era, harnessing the power of data analytics in the cloud has almost become a necessity. The cost of processing and gaining insights from all the data sources out there would be prohibitive. It is near impossible to replicate any ability to predict the required peak processing power. AWS continues to innovate here with services like Amazon Kinesis that is optimized for processing large streams of data records in real time, and Amazon Redshift which provides a fully managed petabyte-scale data warehouse in the cloud.
Healthcare and Financial Services, In the Cloud
What I found most intriguing is that the two industries where I continue to hear the most concerns -- Healthcare and Financial Services -- were able to showcase two shining examples of cloud usage at Siemens Healthcare, as well as the largest US Financial Services regulator organization, FINRA.
And while I have been professing that concerns around data security, though valid, are inapplicable now that required technology and policy are in place to deploy secure cloud solutions, I thought it was tremendous that they were able to pick two very data-centric use cases to further cast a spotlight on the fact that companies are finally phasing out of the fear and uncertainty.
Siemens Healthcare Diagnostics
Siemens Healthcare Diagnostics is in the business of automating labs and developing better diagnostic tests to drive innovation and personalization in health care for end patients. They operate in more than 170 countries and have conducted more than 9 billion patient tests.
Today, many treatment options are often ineffective for complicated health episodes like cancer, mainly because of the complex sub-types of disease classifications that exist. To address this, Siemens created a precision medicine program through partnerships with large pharmaceutical companies to identify and classify these sub-sets of illnesses, allowing patients to create more personalized care programs.
These advanced diagnostics require the processing of huge data sets and the associated processing power to perform the analysis. Since the complexity and frequency of the tests can be highly variable, it is desirable to have the ability to scale processing power on demand. And lastly, given the sensitivity around the patient data, data security is absolutely paramount.
After much due diligence, Siemens concluded that AWS had all the required features, policies and certifications to attain HIPAA-level compliance for building secure cloud-based applications. One such service used to accomplish this was the Amazon CloudTrail service which allows you to track and audit all data and API calls in your infrastructure.
The second example of effective cloud usage that I found rather interesting was with FINRA, a key financial services regulatory and monitoring organization. Saman Michael Far, senior vice president of Technology, highlighted how the company is using AWS to transform its technology platform and development culture.
FINRA receives direct feeds from all of the US exchanges handling approximately 30 billion market events each day, and looks for data patterns that indicate fraudulent activity. Of particular interest to me was that the agency that receives all this financial data from the exchanges has figured out how to adopt cloud to process this highly sensitive trading information, though many exchanges and financial institutions themselves have yet to embrace this.
Processing data at scale is generally a huge problem, compounded by volatile financial market volumes, dynamic exchanges, evolving regulatory rules, and frequent new products and innovations.
Turning to AWS for both platform and data processing needs allowed FINRA to create an agile infrastructure while avoiding specific vendor lock in. The company saw the time required for complex queries dramatically reduce from 1.5 hours to 5-10 seconds. FINRA is expecting to save up to $20 million annually.
Every industry will undergo a natural adoption cycle when it comes to technology services such as the cloud. It is undeniable, however, that the richness and depth of cloud-based services continue to evolve at a rapid and exciting rate. Companies that embrace this shift quickly can gain a level of agility in their businesses that allows for escalated innovation. This can be a liberating experience, one that yields increased attention and responsiveness to the customer.
The Conde Nast video shown during the keynote, “Moving to AWS: A Data Center Take Down,” says it all: it’s time to get your head into the cloud!