Do As I Say: Why the Top Cloud Services Providers Don't Run All Their Own Data On The Cloud

Just because you are successfully selling a service to others doesn't mean it's perfect for you. But should it be? JL

Robert McMillan reports in the Wall Street Journal:

Amazon. doesn’t fully run in the cloud.The other top cloud providers— Google, Microsoft and International Business Machines  continue to keep certain functions on private servers. Their struggles are a microcosm of customers: Worries about reliability, security and risks inherent with change that have made it hard to move critical computing tasks to the public cloud.
For nearly a decade, Amazon Web Services, the giant retailer’s cloud computing division, has told prospective customers: Ditch your data center and trust us to run your applications, store your data and host your internal software development.
Yet Amazon.com Inc. AMZN 0.66 % itself doesn’t fully run in the cloud. Amazon isn’t alone. The other top cloud providers— Google Inc., GOOG 4.27 % Microsoft Corp. MSFT -1.94 % and International Business Machines Corp. IBM -0.79 % —use their own cloud services for some purposes, but they continue to keep certain functions on private servers. Their struggles are a microcosm of the issues that dog their customers: Worries about reliability, security and risks inherent with change that have made it hard to move critical computing tasks to the public cloud.
“The vast majority of Amazon.com runs on AWS,” a company spokesperson said, and it intends to run everything there eventually.
The fact that Amazon still uses private servers is “ironic,” said Ed Anderson, an analyst with Gartner, which advises customers on both cloud services and data center servers. “That’s exactly why we tell people evaluating cloud services, ‘Do not buy into the hype. Do not buy into the myths. You have to be pragmatic, just like these vendors are,’” he said.

 

These cloud kingpins sell metered computing power on demand, a sector of cloud computing known as infrastructure as a service. This market, combined with some other cloud services, has grown from $10.5 billion in 2013 to $19.9 billion this year, according to the research firm International Data Corp. It is projected to be worth to $26.5 billion in 2016. They promise their customers to save money and simplify life with better security and reliability than the average corporate information technology department can manage.
Amazon Web Services leads the pack with a 29% share of the market and is on track to bring in more than $6 billion this year—roughly a third of the sector’s total revenue–by IDC’s tally. But that leadership doesn’t come cheaply. Every day, the service adds as much computing capacity as all of Amazon needed in 2004, the company has said. Meanwhile, it has cut prices and added services at a furious pace to fend off competition from Google, IBM, Microsoft and others.

Amazon began transitioning its own operations to AWS about four years after the service launched in 2006, according to Colin Bodell, who worked on the project when he was an executive there. “Internally, everything new is built upon AWS,” said Mr. Bodell, now the chief technology officer of Time Inc. However, Mr. Bodell, who left Amazon in 2014, said the company ran back-end databases containing confidential data on servers that weren't part of AWS. An Amazon spokesperson said declined to comment on where it stores its databases.
Over the past five years, Google has shifted hundreds of internal apps to its Google Cloud Platform, including programs that store internal technology support documents and manage software licenses. But the company’s flagship search engine runs on private servers, according to Ben Fried, Google’s chief information officer. The same goes for YouTube and Gmail.
“Although these applications run on the same infrastructure, network, storage, systems and services that underpin Google Cloud Platform, we’ve spent many years optimizing them as currently built and do not yet have a defined path to move them over to Cloud Platform,” Mr. Fried said via email.
Microsoft is just starting to move its public-facing services to its Azure cloud. Parts of Skype, Office365, OneDrive and networked versions of videogames including “Titanfall” run on the system, said Jason Zander, corporate vice president of Azure. He expects the number of Microsoft products on Azure to grow. Microsoft also uses Azure for its information technology support systems and product development.
“I’ve got teams internally that are very excited to move onto these systems,” said Mr. Zander.
Amazon and Google promote cloud computing as a shared resource, but Microsoft and IBM help customers set up private clouds within their own data centers. IBM runs a number of its operations on its public SoftLayer cloud, including Bluemix, Watson Analytics and IBM Verse email. But according to John Kelly, the company’s top-ranked technology officer, some computing tasks will always remain private. “For IBM, the end state will be hybrid,” he said.
The cloud providers’ own cautious embrace of cloud computing is becoming more wholehearted, according to Grady Summers, senior vice president of cloud analytics at FireEye Inc., a security company that advises corporations on cloud security.
“In the last year, cloud providers have changed their stance on this,” he said. “I’ve worked with one cloud provider who, a year ago, told me they couldn’t put sensitive data on the cloud. Now they’ve changed their policy.”
Still, some providers may continue to tread lightly before moving entirely to the cloud.
“The CIO at any of these companies is not going to be rewarded if they took a big risk by using  their own cloud services,” said Mr. Anderson of Gartner.