Case Study

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Case Study Amazon’s New Store: Utility Computing
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Case Study Amazon’s New Store: Utility Computing
Introduction
Back in the year 1995, Amazon was opened as a bookstore, one that has grown over the years and morphed into a large reputable internet based company. One of the largest virtual superstores today in the world, Amazon offers up to thirty six categories of products. Jewelry, furniture, clothing and groceries are just but a few of the products that Amazon has to offer. Today, Amazon boasts of being the top online retailer in the whole world (Andrei and Jain, 2009). In an effort to modernize its data centers and software and also be able to add ...view middle of the document...

The entire cost of owning small and medium-sized businesses is greatly reduced.
It is very clear that this type of system is scalable and very dependable for both Amazon and its subscribers. Additionally, Elastic Compute Cloud (EC2) service also allows businesses to be able to utilize servers owned by Amazon for their various computing tasks minus the overhead costs. Amazon competitors like IBM and Sun Microsystems may have to keep on Amazons lead by offering utility computing without the infamous service level agreements (SLAs). The reason being the a number of businesses around the world are ready to promise availability of service in terms of time but are cautious when it comes to suppliers that do not offer SLAs. The Amazon web services pose as another challenge and risk to its web service route and retail line if it fails to place itself in a position that will be able to manage any increase in demand for its infrastructure (Linton, 2011). Another key disadvantage and shortcoming is that the customers may face a number of outages in the service and still fail to get compensations due to the fact that service level agreements do not exist.
A number of businesses are potential beneficiaries of the various services that Amazon as a company can provide. For instance, large and small businesses can benefit from the Amazon web services where the service manages to discharge small businesses from the total cost of ownership that might result from owning individual systems. Amazon web services also provide an opportunity for other businesses to be able to work at web scale without having to make mistakes that have already been done by Amazon. This means that they get to learn from its mistakes without necessarily having to go through them. Finally, another great importance for use of Amazon’s utility computing by other businesses would be that they can use the Amazon web services as an ancillary unit without the need to increase or improve their total cost of ownership or their hardware.
Question 2
Amazon has the responsibility of ensuring that it provides hardware capacity and planning and scalability for itself and its subscribers. This means that no excuses can be made or underestimations be created when it comes to capacity and scalability. The reason behind it being that, they risk running into drastic shortages for their own business, as well as, their subscribers. On the other hand making, overestimates would mean that they Amazon’s financial assets might be affected (Kim, 2009). Frequent instances of non-availability would result in the creation of the impressions that Amazon is finding it hard to manage their services. Amazon has to ensure that it manages to sustain the total cost of ownership of its services at the same time ensuring it manages to generate revenue from it.
Question 3
A number of companies offer and supply utility computing, however, the best examples would be Hewlett-Packard (HP) and Sun Microsystems. Hewlett-Packard...

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