Amazon's Bespoke Cloud Computing Service

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Amazon Web Services introduced a service Wednesday to create private clouds to ease the minds of executives who have security concerns about sending sensitive data offsite.

The Amazon Virtual Private Cloud is designed for companies looking to expand parts of their IT infrastructure onto a cloud computing platform, with thoughts of benefiting from reduced costs that come from sharing hosted computing systems.

By tapping a few application programming interface (API) calls, companies can create an isolated network, specify the IP address range, and launch Amazon EC2 instances into the network. Users then create a secure VPN to bridge to the Amazon Web Services resources to their existing IT infrastructure. The data rides over the VPN and is verified by the company's existing security and networking technologies before heading to the public Internet, or "the cloud."

Forrester Research points to the downturn in the economy for the increase in interest and adoption rates of cloud computing. And while cloud computing can improve operational efficiency, reduce headcounts and help improve the bottom line, security and privacy concerns present a strong barrier to adoption.

The Forrester report "How Secure Is Your Cloud?" provides the example of Google's security flaw that led to some Google doc users inadvertently sharing content with a wider audience than they intended. Although technology has come a long way in the past year, the report also cites an incident in 2007, where one of Salesforce's employees fell victim to a phishing attack that led to the leak of a salesforce.com customer list.

Forrester Analyst Chenxi Wang offers a security and privacy checklist before making the flight into the clouds. The topics range from data protection and vulnerability managing to identity management and physical and personal security. She suggests that companies consider the "compelling business driver and a clear understanding of the security, privacy and legal consequences."

Even with security concerns, cloud computing has become more popular in a variety of industries, including advertising, marketing and education. In July, Quantivo released a behavioral analytics service hosted on Amazon Elastic Compute Cloud, Amazon EC2, which the company says increases or decreases a client's computing capacity within minutes.

Last week, Broadpoint AmTech Analyst Ben Schachter published a note suggesting "Google's efforts to bring its suite of online apps to educational institutions represent just one front in its battle to penetrate the market for cloud-based computing services."

While the market remains young, the education vertical represents one sub-segment of an industry that has the potential to be a very large and broad opportunity for Google during the longer-term, Schachter wrote.

Amazon Web Services cites Eli Lilly as an early adopter. For about a year, the pharmaceutical company has been using Amazon EC2 and other cloud computing services to provide faster performance on demand to hundreds of its scientists and technical staff. The service allows the company to easily integrate internal computing platforms with Amazon EC2.

An Amazon Web Services spokeswoman says the service supports a broad spectrum of companies worldwide, from Animoto and Playfish to larger companies such as Pfizer, National Geographic, The New York Times Company, NASDAQ, and ESPN. "The Web Scale Computing services that Amazon Web Services offers are based on Amazon's own back-end technology infrastructure that we've spent over a decade building," she says.

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