Opportunities of Amazon's Cloud-Based Storage - Case Study Example

Answers to case study questions 1. Amazon offers cloud-based storage, which is an internet service that provides storage for computer users (Shelly et al, 2011, p. 385). Cloud storage services such as Amazon benefit from the technology due to the payments that subscribers of these services make. Cloud-based storage is available for all sizes of users and there are various degrees of storage services available for business and home use. The storage fees vary depending on the user’s storage requirements and this is how the storage service providers such as Amazon benefit (Shelly et al, 2011, p. 385). There are numerous advantages that subscribers of cloud-based storage derive. First is scalability in that most cloud-based data storage services enable them scale their storage (up or down) to align with their storage needs. Second is that subscribers can pay only for the storage that they need. Third is reliability as many cloud-based data storage facilities offer transparent data replication. Fourth is ease of access as many cloud-based data storage facilities support web-based access to files from any location, at any time, using a wide array of devices. Cloud-based data storage solutions are also easy to use (Jamsa, 2012, p. 70). The disadvantages of cloud-based data storage to providers such as Amazon include the point that many businesses may have the tendency to use a more established company and the viability of their systems, which may be affected by failures (Laudon & Laudon, ****, p. 231). To subscribers, the disadvantages of using cloud storage include slower speeds of accessing information in comparison with using local drives, security concerns and the risk of data orphans – leaving confidential private company information in cloud storage facilities. All types of businesses that require space for archiving data that is infrequently accessed, undergoing replacements, or those which are looking for simplified compliance management systems can use cloud-based storage (Bloomerg Businessweek, 2010). Examples of such businesses include Microsoft and Nasdaq. 2. Capacity planning refers to the approximation of how much computer software, hardware, connection infrastructure and space will be required over a given period of time (Hurwitz, 2012, p. 239). It is anticipated that the growth of AWS could be harmful to Amazon’s web services line and retail if Amazon does not accurately handle the capacity planning aspect with respect to the required infrastructure (Laudon & Laudon, ****, p. 231). Scalability refers to the ability of cloud-based data storage users to increase or lower their storage capacity in regard to their storage needs (Jamsa, 2012, p. 70). For instance, Powerset has adopted a pay-as-you-go model with Amazon, which enables it (Powerset) to gradually scale up its storage capacity as it grows and its storage needs increase (Laudon & Laudon, ****, p. 231). Significantly reduced total cost of ownership (TCO) is one of the driving forces behind cloud computing. This refers to the costs involved in owning the required IT infrastructure as well as software including but not restricted to purchasing, operating, maintaining, and updating costs (Wang et al, 2011, p. 198). It is notable that if cloud-based storage companies such as Amazon incur very high TCO, then they will pass them to their subscribers in terms of the fees they charge for the services. It is therefore important for such companies to avoid unnecessary costs so as to charge reasonable amounts for cloud-based storage services and hence attract more subscribers. 3. Examples of companies that supply utility computing are Rackspace services and Netflix. Rackspace offers managed hosting, public and private cloud hosting, as well as online business applications. The managed hosting service offers an extensive set of products and services, for instance backups, reporting, managed storage, professional services and security. The company also emphasises its commitment to offering robust support related services (Campesato & Nilson, 2010). The Rackspace cloud suite comprises three hosting services: cloud servers, cloud sites, and cloud files. The cost of these services starts from USD 0.015 per hour, USD 100 per month, and USD 0.15 per gigabyte respectively (Campesato & Nilson, 2010). Rackspace’s customers range from one-server configurations to complex configurations that span hundreds of servers as well as high performance network gear (Johnson, 2009, p. 181). Rackspace operates in much the same way as Amazon’s AWS but is only Linux as opposed to Amazon’s mix of server operating systems. Because of the single operating system, the typical mixed environment of a larger company does not exist as it does in Amazon (Lillard & Garrison, 2010, p. 7). On the other hand, Netflix recommends movies to customers based on their renting habits. About 60 percent of the company’s members choose new rentals based on these recommendations (Schermerhorn, 2011, p. C-20). A customer can choose DVDs based on their individual tastes and preferences that are then sent to them by mail or streamed online. Netflix uses what customers prefer to suggest to them the movies that they can rent. Similarly, Amazon uses digital technology to predict what types of music and books that their customers might wish to buy. Amazon sends personalised emails to each customer giving suggestions based on each customer’s buying habits. Therefore, both Amazon and Netflix use customer relationship marketing as an important marketing tool (Miller & Hollowell, 2010, p. 217). If I were to choose a company to provide web services, I would choose Amazon over Rackspace and Netflix because Amazon is versatile and offers a diverse range of services. I would still choose Amazon if I were working for a large company because of the company’s diversity of services and usability on different operating systems. 4. I have a business idea of an online-based shop whereby customers view products online, order for them, pay and have them delivered at their homes. To achieve this, it is necessary to have an archive of customer’s contacts of maps of their locations. The business can use Amazon’s S3 storage to store and retrieve any amount of data, at any time and from anywhere on the web (Amazon Web Services, 2012a). With it, the business can identify the customers in need of various products and have the products delivered from the store that is located nearest to them. Amazon S3 is good for a start-up because with it, the new business does not have to worry about the number of servers it will need for storage since it can just order more storage without the need to purchase any more machines (Gardner, 2008, p. 129). Amazon EC2 is applicable because it provides a resizable compute capacity that can be modified in almost real time to adjust to increased or decreased traffic on a website (Watson, 2009, p.263; Amazon Web Services 2012b; Petersen, 2011, p. 320). This is applicable for different shopping times such that the capacity can be increased when there are many shoppers and reduced when the number declines. Amazon EC2 can be used on a variety of operating systems such as Linux, Windows Server 2003, Ubuntu Linux and many more (Redkar, 2010, p. 21) and this makes it suitable for a start-up. References Amazon Web Services (2012a). Amazon Simple Storage Service (Amazon S3). Retrieved 23 August 2012, from http://aws.amazon.com/s3/ Amazon Web Services (2012b). Amazon Elastic Compute Cloud (Amazon EC2). Retrieved 23 Bloomerg Businessweek (2010). “Why cloud storage is feasible in 2010”. Retrieved 23 August 2012, from http://www.businessweek.com/smallbiz/tips/archives/2010/03/why_cloud_storage_is_feasible_in_2010.html Campesato, O. & Nilson, K. (2010). Web 2.0 fundamentals: With AJAX, development tools, and mobile platforms. New York: Jones & Bartlett Publishers. Gardner, J. (2008). The definitive guide to pylons. New York: Apress. Hurwitz, J., Kaufman, M., Halper, F. & Kirsch, D. (2012). Hybrid cloud for dummies (2nd edition). New York: John Wiley & Sons. Jamsa, K. A. (2012). Cloud computing. New York: Jones & Bartlett Publishers. Johnson, E. (2009). Rackspace, In G. Reese (ed). Cloud application architectures: Building applications and infrastructure in the cloud. New York: O'Reilly Media, Inc., pp. 181-184. Laudon & Laudon. Management Information Systems. 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