Mother Nature Troubled Amazon in Australia

 

A weekend storm has heavily  damaged Amazon's operations in Australia as their power failures were suffered by businesses for a long time period.

Amazon faces tough times in Australia after the Sydney storms halted the operations of number of Amazon Web Services consumers. As a result, a warning has been issued to Australia based businesses that they should spread the risk in their cloud computation operations across various different areas. The fierce storms that hit New South Wales, left clients of AWS including Stan and Domain, The Iconic, FoxTel and Domino’s Pizza without key systems or websites accessibility for hours.

The storms also serve as reality check and underline the fact that choosing cloud computing over on-premise hosting doesn’t mitigate the risk of expensive failure. The fiasco tarnished the organization’s image –which, over the years, represented strong reliance –and brought upon a huge humiliation for Amazon, which earned $2.57 billion sales revenue in the recent quarter. The catastrophe pointed out that the consumers who had acute trust on company were stopped from carrying out their trading from mid-afternoon till late morning on 6^th June 2016.

AWS didn’t respond to the questions when asked what caused the humungous failure. A spokesperson also refused to share views regarding whether affected enterprises would be eligible for compensation, and what destruction the failure has led to for its own local business.

It’s assumed that energy was lost in numerous systems in its own data center, prior to being restored around two hours and 30 minutes later. It then took a huge amount of time for certain systems to be re-booted as well as brought back online. Experts stated consumers who insisted that their data and every system that remained in the country had been affected, as other consumers traded normally after moving the data to Singapore.

Analyst at IBRS Joe Sweetney stated most would use the failure as an instance of why enterprises must not adopt cloud computation. Nevertheless, it was a big wake-up call for enterprises to organize their technology in such a manner that the failure of one data center wouldn’t be as fatal as the current one.

During weekend storms, outages were faced as over 226,000 houses as well as businesses lost energy. Public transport, bridges and roads were also harmed.  Mobile ordering and payment service provider AirService’s main provider is AWS, but had another one prepared to go in case of a failure.

"As amazing as AWS is, and we've been using it for a long time, we do understand that things can sometimes go wrong," AirService CEO Dominic Bressan stated..

Alphabet To Invest In Artificial Intelligence

Alphabet to deploy its resources in artificial intelligence.

Alphabet Inc. the parent company of Google is all keen to expand in cloud machine learning generally known as artificial intelligence (AI) suite to certain handpicked developers. The platform at this point of time is in “limited review” but it is a big step to expand the services beyond storage. Some of the company’s core applications are already using "cloud machine learning," such as “Photos (image search), the Google app (voice search), Translate, and Inbox (Smart Reply)." However, now this platform will be accessible by business.

In a blog post, Fausto Ibarra, the Google Cloud Platform director of product management stated, "We're on a journey to create applications that can see, hear and understand the world around them.” The Cloud Machine Learning is an easy way for the masses to come up with large scale, sophisticated machine learning model in a relatively short span of time. the platform is fully regulated, portable and can be scaled as per choice.

The search engine giant has come up with a massive breakthrough by giving its cloud based infrastructure the ability to get customized. This will add to its present functionality and can eventually turn out to be a game changer. This will not just enable consumers to move resources and data offsite to the cloud but will also offer diversified artificial intelligence functionalities. This is similar to the one stop solution provided by Microsoft and IBM. However, the question is what took the company so long to implement this change?

Alphabet is very well acquainted to artificial intelligence. This can be governed by the fact that the company has tweaked its search algorithm to make use of RankBrain. With no to little fanfare, the company came up with search results last annum. However, studies claim that the results are not really profitable. RankBrain is just one service by GOOG that has been deployed featuring AI to enrich user experience. So now, the tech giant has adopted a different path where it will deploy its Artificial Intelligence technology in its products.

IBM is spending almost $5 billion on its analytics solutions which runs via cloud computing powered by cognitive computing breakthrough, Watson. On the other hand, the CEO of Microsoft, Mr. Satya Nadella emphasizes on the cloud pillar for the company’s "mobile-first, cloud-first" initiatives. Both the initiatives are doing quite well and have garnered popularity. Through cloud services, IBM is already generating an yearly run rate of $4.5 billion. On the other hand, Microsoft is acing in this domain with annual run rate of $9.5 billion.

Alpahbet presently does not share the revenues from cloud computing. But considering the performance last year or last quarter, then it is nowhere close to IBM or Microsoft.  In the fourth quart of FY14, Alphabet generated $2.1 billion through its "other revenues," which is 10% of the company’s overall total sale of $21.18 billion. Other revenues are made up of Fiber, Google Play and cloud computing sales whose 10% revenue are almost negligible. Thus, there is a lot of potential for them to tick out of it.

Google Is Competing With Amazon Web Service

Google is competing with Amazon in the cloud computing space.

Alphabet Inc.’s Diane Greene, the new chief of the company’s cloud computing domain did not have good news for its employees during the company’s internal sales meeting that took place at Las Vegas last month. The tech giant came to a unanimous consensus that they need to take their customers seriously, need to endorse their services better, be aggressive and complacent to embrace a change.

This was a rather strange message that was revealed by the search engine giant, since the company lays emphasis on technology in contrast to marketing and sales. However, the move was quite necessary. The company ranks third in the cloud computing domain which is the next big thing in the IT fraternity. As per Gartner Inc. the industry is likely to grow by 35% next annum where it is likely to make business of $20 billion a year as estimated. Thus, to reach the top in this segment, the company needs to increase the number of data centers it operates. This will be in compliance to their strategy of relying on technology to sort out the obstacles that are thrown their way.

However, Diane Greene is also adopting new strategies that are unlike the playbook of GOOG. The company is designing tools which will help it to increase its corporate user base to indulge less tech savvy clients. It is also looking for fresh talent who will be responsible to sell and endorse the product offerings.

"There was a pretty darn good vision in place and now I’m just bringing everybody together so that we all know what we’re doing," stated Greene- who is the part of the company’s Board of Directors. “The cloud is a revolution, I mean it’s rivaling the industrial revolution, and it’s pretty fun being this involved."

Google initially invested the cloud platform for its own use back in 1990 and 2000. Google thus left Amazon.com Inc. to transform the idea into a service that could be rented by other firms. This eventually paved way for Amazon Web Services which transformed into a service that had a net worth of $8 billion in FY15. This made AWS the uncrowned king of the fraternity sabotaging Microsoft and Google that only garnered $500 million as per Morgan Stanley.

Back in November, Google recruited Greene so it could change its fate. She is a maestro in the Silicon Valley who founded VMware Inc. that debuted virtualization in the data centers of big corporate giants. Basically, virtualization enables a computer to perform tasks of several computers. This was the ability that paved way for Amazon Web Services. 10 years after the launch of VMware, Ms. Greene was fired and in just a day’s time the fate of the company changed.

In the coming months, Google is likely to establish two cloud regions. The company will come up with data centers that will be loaded with software and computers that can be rented over the Internet in Japan and Oregon. More data centers will be established in 12 to 1 months that will either be leased or will be operated under Google.

Alibaba Plans To Take on Amazon In The Field Of Cloud

Move comes as the Chinese ecommerce giant stakes in a series of partnerships to bolster cloud offerings.

In yet the latest signs of its troubles related to operating in China in the face of continuing economic slowdown, as evidenced from a decline in both exports and imports, Alibaba Group Holding Inc. (NYSE:BABA) has made a strong push of boosting its cloud offerings by entering into partnerships with global companies that are likely to prove great synergies, and also give competitors, such as Amazon, Google, and Microsoft a run for their money.

The deals will see Alibaba Group cloud computing division, Aliyun, utilize the existing data centers built by partners such as Intel, US data center company, Equinox, and  Singapore telecom giant, SingTel, so as to push their own services on the horizon. The move will see the Chinese corporate giant saving money and to localize its services to tap into new markets.

Simon Hu, President of Aliyun, stated that with more storage problems and more clients demanding for data analytics services, it has led to this move. The main clients will be small and medium sized businesses, who will be given advanced infrastructure to harness the power of big data and analytics.

It is not going to be an easy fight though. Amazon, IBM, and Microsoft are already big and dominant players in the $16 billion market, and their growth shows no sign of slowing down. However, this has not stopped Alibaba cloud computing revenue from growing from 213 million yuan to over 390 million yuan, which is more than 80% growth. The revenue earned is a tiny fraction of the amount that the company normally earns from charging a fee for exporters and importers.

Mr. Wu said that Alibaba is not scared about the competition, rather they are willing to learn from their US rivals and to benefit from “technology products and create a better balance and increased efficiency.“ When asked about pricing, he said that it would most likely depend on the locality.

Aliyun’s expansion outside China is not new since Alibaba had opened up a data center in the Silicon Valley, but the move suggests that it intends to utilize economies of scale by going for partnerships with other data centers and not having to go through the trouble of being burdened by building more data centers, even if they have bullish assessments about the analytics market.

 Alibaba’s stock price ended the day at $90.70, a gain of 0.12% from the previous week, after reaching the initial high of $91.5 in the middle of last week.