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Interviewing Software & IT Leaders
...there is a new class of "software as a service" that really gets the wheels turning in my head.
At the European Software Conference (ESWC ) that has taken place on the 3rd and 4th of November 2007 in Köln, Germany, I have met Mike Culver, one of the Amazon Web Services evangelists. I loved his presentation "Life in a Post Web 2.0 World" and I was amazed on what Amazon is up to in the Web Services space. I was honored to interview him.
Here are his thoughts about the software industry and the way we can all benefit from Amazon's expertise and infrastructure.
Adriana Iordan: My first question for all our guests: can you tell us a little about yourself, your background and how you got to be Web Services Evangelist at Amazon?
Mike Culver: Like many people, the path from then to now has all sorts of curves in it. The short answer is that I was managing a team of Technical Evangelists at Microsoft for a number of years. I'd left evangelism to join the Business Group in Microsoft Business Solutions; however I found myself really missing evangelism. Along came a recruiter who pointed out that Amazon was working on some really amazing innovation, and you know the rest of the story!
The slightly longer answer is that I've been a geek all my life, starting as a kid when I had my Amateur Radio License by age 13. Went on to major in business (I have a degree in Finance); however the lure of technology pulled me away from heir-apparent for a family business back in the eighties.
That led to almost ten years managing an IT organization, after which I founded a company that was a very early provider of e-Commerce solutions. Microsoft discovered our expertise, and convinced me to join as a technical evangelist. Been one ever since…
Adriana Iordan: What would you tell a small software company to convince them to work with Amazon Web Services? Please tell us briefly about the AWS (EC2, S3, SQS, Mechanical Turk, AWIS). How can a software author benefit from each one of them?
Mike Culver: Essentially what developers are being offered is access to the same technology that made Amazon great. We spent 11 years and over $2 billion building the infrastructure, technical knowledge, and operational excellence to operate a world class web-scale computing platform. Amazon Web Services is a set of web services that enable developers to leverage Amazon's learning and robust infrastructure, at costs that can best be characterized as "cheap".
All of our Web Services are designed for software developers, and although many of our services are available to end users and businesses, it's software developers who created the higher-level implementations.
There are a total of ten Web Services, and there is no way I can describe all of them in this interview. However I will use three of them as an example of how we solve real-world problems that small ISVs face every day. If you think about what it takes to run a data center, there are three things needed in every case:
You asked about Mechanical Turk . This is a really innovative Web Service-it allows people to work on standardized XML requests, and return the result as a standardized XML response. Imagine, for example, a scenario where a shopping comparison site needs to decide which online shopping site has the best price on a particular camera. They need to make certain that they are comparing apples to apples, so they create a Mechanical Turk request that instructs the "worker" to look at photos on each site and make certain the two cameras are the same model. That's easy for a person to do, but not practical as a completely automated software algorithm. By the way, the worker gets paid a nominal amount of money for checking. The price is set by the "requestor"; and is typically something on the order of $0.02 to $0.05 per request.
But you can't talk about this technical innovation without mentioning the business model, because the business model is at least as important. All of these Web Services are very startup friendly. You only pay for what you use, which means that there are no upfront costs, so you don't need to give up equity or incur huge capital expenses, because costs scale with usage. And hopefully usage and revenue are related, so you'll never wonder how to pay for your on-demand infrastructure.
Adriana Iordan: Are all these services available in Europe?
Mike Culver: All of our services can be accessed from Europe; however not every one of them is currently available to software developers based outside the United States. For example, Amazon Simple Storage Service (also known as Amazon S3), offers data storage "in the cloud", or more precisely in Amazon Data Centers. Customers are able to specify whether they want their data stored in the United States, or in Europe. On the other hand Amazon Elastic Compute Cloud (a.k.a. Amazon EC2) does not yet offer servers based in Europe.
Adriana Iordan: Is it possible to run an internet company without owning a server?
Mike Culver: Thought you'd never ask! Not only is it possible, the consensus is that this is the only rational approach to starting an online company.
If you think about the cost of a startup, one of the largest and most unpredictable components is the computing infrastructure. It's really tough to know with certainty what demand will be, which in turn makes it hard to build out server capacity that is matched to real-world demand. So companies end up over-spending on hardware, because no one wants to be caught short. However the reality is that more ideas fail than succeed, so a large portion of startups end up holding a fire sale on eBay, where their shiny new server farm is sold off for pennies on the dollar.
In the new world there are services such as Amazon EC2, with a completely new business model. Amazon EC2 changes the economics of computing by allowing you to pay only for capacity that you actually use.
On one hand, Amazon EC2 is innovative because it is a self-serve on-demand virtual environment that allows start-ups to create virtual server farms without owning any hardware. On the other hand Amazon EC2 id revolutionary because the business model associated with it is no fixed costs, no sign-up costs, and no monthly minimum fees: in short, the "a" in the formula is removed, and the "bc" is as low as $0.10 per hour (that's $72/month if you leave a server on 24/7).
Better yet, Amazon EC2 enables you to increase or decrease capacity within minutes, not hours or days. You can commission one, hundreds or even thousands of server instances simultaneously. And using automation, your application can automatically scale itself up and down depending on its needs.
Adriana Iordan: How many developers have signed up with AWS? What are some of the registered developers of AWS Developer community building? Can you give us a few examples of innovative applications built upon or working with AWS?
Mike Culver: This is a really amazing story! There are over 290,000 registered developers in our community, building incredible innovation on top of the platform. The reason I use the word "amazing" is that some of these services are only a few months old, and even our oldest service (Amazon Associates Web Service ) is only about four years old. The strong community size speaks to the perceived value out there in Developer Land.
There are so many great examples that it's hard to pick just one or two. Nonetheless, here's a couple:
Video rendering seems to be a perennial favorite. Animoto created a super cool application that turns photo slide shows into videos, complete with sound tracks. You need to visit their site and create a video to see what I mean. It's free, by the way. Animoto makes use of three different Amazon Web Services: Amazon EC2, Amazon S3 for storage, and Amazon SQS for message queuing.
Software distribution can be a real problem for ISVs of any size, so even the big kids on the block make use of Amazon Web Services. For example, Second Life uses Amazon S3 as a high-capacity pipe to download their client software. There are well over a million Second Life users, and each of them needs to download a client that is over 30 MB in size. This used to be a problem, because all those users downloading the latest client maxed out the Second Life Internet connection. They solved the bandwidth issue by moving the downloads out of band-that is, to our pipe.
And finally there is the New York Times . They created 11 million PDF files of old newspaper stories dating back to 1850. The project involved uploading 1.5 Terrabytes of data to Amazon S3, then starting up 100 instances of Amazon EC2 to crank out the 11 million articles in just 24 hours. In fact, they discovered a bug in the process, and simply re-ran the entire batch one day later. Afterwards they turned off the server farm, and the bill dropped to $0.00. That's true on-demand capacity!
Adriana Iordan: You spoke at ESWC and you are frequently giving presentations to software developers and communities. From your point of view, what are the biggest mistakes you tend to run into with most software companies or products?
Mike Culver: Without question, the number one mistake software companies make is trying to do everything themselves. You need to understand your core competencies, get really good at them, and outsource the rest.
We did a survey here inside Amazon. We like to call it "Amazon's dirty little secret" that about 70% of every development team's time was spent on undifferentiated work. That would be things such as negotiating contracts for data center space, buying and configuring the servers, etc., etc. Organizations other than Amazon have similar stories to tell, and the sad part is that none of this 70% of your time adds value to your product or project! So if you can eliminate the work altogether, you'll be far ahead of your competition.
Adriana Iordan: What's the future of software, web-based or licensed? What are the positives and negatives of each one of them?
Mike Culver: I'm not going to speculate on the relative merits of each model; however - we believe on-demand infrastructure makes compelling business sense. If you look at the sorts of companies who have adopted our platform; I believe the evidence is there to show that our "pay by the drink" business model is both compelling and durable.
Adriana Iordan: What is your take on where "software as a service" will fit into over time? What are some of the opportunities for software as a service?
Mike Culver: Again, speculation isn't my thing. However there is a new class of "software as a service" that really gets the wheels turning in my head. As I mentioned earlier, Amazon EC2 offers virtual servers on an hour-by-hour basis, with a "pay by the hour" business model.
Like all virtual machines, there is ultimately a file on disk that represents the "machine", or computer. We call these files Amazon Machine Images, or AMIs. There are three sorts of AMIs: public, private, and paid.
Public AMIs are images that are just that: you log in to Amazon EC2, pick a machine image from a list, and start it up.
Private AMIs are ones that you tailor to your own needs, and store in Amazon S3. These images might be customized versions of a public AMI, or they might be an image you created in your office and then uploaded to Amazon S3.
However paid AMIs are an entirely new form of Software as a Service , or SaaS. Imagine that you created a custom AMI that provides additional value to others. Perhaps you write a CRM application that lives in your AMI. We allow you to set a price that others will pay, and then we take care of the administration associated with "selling" your AMI.
An example is the easiest way to understand this. If your paid AMI runs on our smallest Amazon EC2 size, we charge $0.10/hour to run the virtual machine. You are able to set your own price-say $0.12-and Amazon takes care of collecting the money and passing it along to you. In this example, we'd deduct $0.10, then pass along the extra $0.02 less a commission. You now have an annuity stream of revenue! Really cool, in my opinion.
Adriana Iordan: How do you feel about the concerns some software entrepreneurs have regarding the privacy, security and reliability of using web-based services?
Mike Culver: Every company and individual needs to be thinking about privacy and security as a core part of their architecture and operational environment. We certainly do at Amazon! In fact, we designed the Amazon Web Services lineup with these two concerns front of mind.
For example, Amazon S3 uses a public key/private key approach to protecting your access credentials to the service. Each and every Web Service call into Amazon S3 requires that you create a signature that is based on your private key, the bucket (directory) the data is in, the object name, the method you're calling, a time stamp, and a time to live for signature validity. Then the Web Service call-and your data-are typically transmitted over SSL.
Each object in Amazon S3 is private by default, and comes with an Access Control List. Unless you open up the object as fully public, the signature is required.
However security and privacy are about more than just wire-level transmission. All of Amazon's data centers are very secure, and only a very short list of Amazon employees have access to them.
Finally, the ultimate way to ensure that data is private is to encrypt it before you ever put it on the wire. Then no one except those with a client-side certificate can read your data.
Adriana Iordan: Can Second Life help software companies to market themselves and their products?
Mike Culver: There's all sorts of innovation going on, and Second Life is one of the best-known examples of new ways to do business. It's too early to say which of these ideas will succeed; however I believe that all of them are worthy of close examination and experimentation.
If you think about Second Life, it's another example of social computing (after all, what would Second Life be without other people inside it). Without question, social computing is here to stay, and it will weave its way into the fabric of everything we build as software developers. The only question is how social computing will surface inside legacy software.
Adriana Iordan: You have been around the industry for quite a while. Of all the things you've done, what are you most proud of?
Mike Culver: Any of the really major innovations I've participated in have been team efforts. That's true, whether we're talking about Microsoft's .NET Framework, or whether we're talking about Amazon Web Services. So I'm proudest to be part of an organization that is changing the way we think about computing. Ten years from now on-demand virtualization well most likely elicit yawns when mentioned. Not because it's boring; but rather because it will be such an everyday part of life that people won't understand why the subject even came up. And I'll know where it all started!
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