Amazon Web Services has slammed the "old guard" of technology vendors which it claims continue to offer "archaic" on-premise private cloud deployments to customers in a bid to protect their margins.
At the AWS Summit 2013 in London today, Andy Jassy, senior vice president, Amazon Web Services and Amazon Infrastructure, told delegates that the traditional IT companies have failed to keep pace with the growing acceptance of public cloud among enterprise customers, and instead continue to focus on shifting hardware as part of private cloud setups.
"In the early days of the cloud, these old guard technology companies pooh-poohed the cloud - they said nobody is going to use it for anything mission critical, enterprises will never use it," said Jassy.
"Well it is hard to fight gravity. After all the handwaving, and as start-ups, mid-sized companies, enterprises and the public sector have started to adopt the cloud really quickly, the old guard technology companies said 'you are right, the cloud is actually substantial, but what you really want is the private cloud - we will give you everything AWS gives you but we will give it to you on-premise'.
"That sounds good, but when you actually look at the details, it has none of the benefits [of the public cloud]. To build a private cloud from scratch now is ill-advised - it is not cost-effective, it is not the way world is going, it is kind of an archaic solution."
He was keen to highlight the findings of the latest Gartner Magic Quadrant report, which claimed that AWS has around five times the amount of capacity compared to the combined total of its nearest 14 competitors. He said that the large scale, low margin business that AWS runs - allowing it announce 37 price drops over the seven years - has enabled it to pass on benefits to its users, and in turn to their own customers, something he believes the traditional IT vendors are unable to do.
"The old guard technology companies have charged enterprises as much as they are willing to pay, and that has been a high amount, and it has been a good business for them - it has been a very high margin business for them," said Jassy.
"[AWS' public cloud] is a very different model, and it is very disruptive to these old guard technology companies."
Jassy added that that he expects that within the next two decades the on-premise data centre is likely to become a thing of the past, citing examples such as Netflix, which runs its entire infrastructure on the AWS cloud, and News UK, which plans to complete its migration in the next two years.
"In 10 or 20 years from now, hardly any company is going to own their own data centre, and if they do it is going to a much smaller footprint than they have today," he said.