For those of us who were in the internet, frame relay, ATM space in the 90's and until the Internet bubble burst in the early 2000's, night terrors may come as a result of the term "over-subscription". For those of you who were not, the term refers to selling more customers on a service or circuit than the circuit can hold. So for example, if a circuit can hold 100 people you sell 200 because you think not all users will be on at any given time. We learned the hard way you cannot over-subscribe. If you choose to, please don't get greedy and do it after you have proven yourself in the cloud space. Over-subscription this early in the cloud life-cycle not only will blacken your cloud, but also that of the industry.
Why do I bring this up? Apparently, there is speculation it is happening again and this time with one of the leading cloud computing offerings, Amazon's EC2. Customers have been noticing a degradation in service and suffering performance problems that would be associated with over-subscription. They have been accused by a customer with a large instance of the product or over-subscribing the cloud, which means the client will have to purchase more in order to meet the customer requirements.
This issue brings up realities that continue to be problematic. Especially in light of the recent Microsoft-HP partnership. How do you deliver low cost services to businesses of all sizes while still making a profit without over-subscribing and potentially degrading quality? I don't have the answer and when asked, Amazon's remarks were vague enough to wonder if they did, either. Amazon's remarks to the question of this old-school carrier strategy were, “We do not have over-capacity issues. When customers report a problem they are having, we take it very seriously. Sometimes this means working with customers to tweak their configurations or it could mean making modifications in our services to assure maximum performance.”
What does that even mean? As a potential customer I would want to know if there is over-subscribing and at what ratio. Personally, I have been involved with several major IP backbones which we did over-subscribe but only after a long analysis so our clients would not ever feel the pain. I have been bullish about Amazon from the start and I certainly hope this is a one-off situation and not a premonition of things to come. So stay tuned for updates that I will pass along as Amazon provides further details.
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