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Should Businesses Move to the Cloud? CASE STUDY

Cloud computing has just begun to take off in the business world. The biggest player in the cloud computing marketplace is one you might not expect: Amazon. Under its Web Services division (AWS), Amazon has streamlined cloud computing and made it an affordable and sensi- ble option for companies ranging from tiny Internet- start-ups to established companies like FedEx.

AWS provides subscribing companies with flexible computing power and data storage, as well as data management, messaging, payment, and other services that can be used together or individually as the business requires. Anyone with an Internet connection and a little bit of money can harness the same computing systems that Amazon itself uses to run its now $48 billion a year retail business. To make the process of harnessing the cloud simpler, Amazon added an automated service called CloudFormation that helps customers get the right amount of computing resources. Customers provide the amount of server space, bandwidth, storage, and any other services they require, and AWS can automatically allocate those resources.

Since its launch in March 2006, AWS has contin- ued to grow in popularity, with $1 billion in business in 2011 and hundreds of thousands of customers across the globe. In fact, Amazon believes that AWS will someday become more valuable than its vaunted retail operation. Amazon’s sales pitch is that you don’t pay a monthly or yearly fee to use their com- puting resources—instead, you pay for exactly what you use. For many businesses, this is an appealing proposition because it allows Amazon to handle all of the maintenance and upkeep of IT infrastructures, leaving businesses to spend more time on higher- value work.

The difference between cloud computing today and the cloud computing of the past is the scale of today’s clouds and the amount of digital data requiring storage. This number has increased exponentially in the past few years. Web companies used to build dozens of data centers, often up to a half a billion dollars in cost per center. Leading cloud companies such as Amazon, Google, and Microsoft have built software that uses automated methods to spread data across the globe and control thousands of servers, and they have refined data center designs with the goal of increasing efficiency. Now, more

than ever, companies are turning to cloud computing providers like these for their computing resources.

Zynga is a good example of a company using cloud computing to improve its business in a new way. Zynga is the developer of wildly popular Facebook applications like FarmVille, Mafia Wars, and many others. With over 290 million monthly active users, Zynga’s computing demands are already signifi- cant. When Zynga releases a new game, however, it has no way of knowing what amount of computing resources to dedicate to the game. The game might be a mild success, or a smash hit that adds millions of new users. The ability to design applications that can scale up in the number of users quickly is one of Zynga’s competitive advantages.

Because of the uncertainty surrounding resource usage for new game launches, Zynga uses Amazon’s cloud computing platform to launch new offerings. That way, it can pay only for the resources it ends up using, and once game traffic stabilizes and reaches a steady number of users, Zynga moves the game onto its private zCloud, which is structurally similar to Amazon’s cloud, but operates under Zynga’s control in data centers on the East and West coasts. Zynga’s own servers handle 80 percent of its games. (Zynga recently started selling extra capacity on zCloud to other game-makers.) To streamline the process of moving application data from Amazon to the zCloud, Zynga has automated many computing tasks, selected hardware and chip configurations that are very similar to Amazon’s, and makes significant use of virtualization.