Amazon cloud seeks to revamp corporate IT One hundred and fifty years ago, most businesses in the US and Europe that used electricity generated it themselves. "And that was very natural," says Andy Jassy, one of Amazon's senior executives. But once electricity grids emerged, the lower costs from their economies of scale meant that generation on premise no longer made sense, he explains. Companies" access to what is now a basic need was transformed - and Mr Jassy, as head of Amazon's fast-growing cloud computing business, is helping to mastermind a comparable transition. "We are at the early stages of the same type of shift in computing, where the economies of the cloud are so compelling that it's not going to make sense to own your own data centres over time," says Mr Jassy, senior vice president of Amazon Web Services. In a potent challenge to the tradition of in-house servers and IT staff, Amazon and Nasdaq will on Tuesday unveil a service to let stock market brokers store gigabytes of post-trade data that they need to keep for regulators on Amazon's cloud computers. Thousands of institutions already run part of their operations on Amazon Web Services - including Netflix, France's SNCF railway corporation, the Guardian media group in the UK and Nasa's jet propulsion laboratory. While the six-year old cloud business is still overshadowed by the Amazon web store, its reach underscores Amazon's role as a basic service provider whose systemic importance makes it look more like a utility company by the day. Mr Jassy, who as an aide to Jeff Bezos, Amazon's founder, was once known as "Jeff's shadow," does not shy away from the analogy. "We're trying to build a business that makes it inexpensive, efficient and easy for customers to focus their resources on what really differentiates . . . their business, instead of having to spend a lot of money and a lot of resource on what we call the undifferentiated heavy lifting of infrastructure," Mr Jassy says. Another client is Bankinter, a Spanish bank that runs its credit risk simulations in Amazon's cloud. "Those simulations that used to take 23 hours in their own data centres, they now run in 20 minutes on AWS and they run for a lower cost," Mr Jassy says. But while the importance of basic services such as power and water has led to regulation, Mr Jassy does not extend his analogy that far. "We don't spend a lot of time on that particular topic," he says. He has, however, had to deal with the fallout from system outages - one last April and two this June - that disabled the websites of some of its clients. Mr Jassy nonetheless says the Amazon cloud's performance since its creation has been "outstanding" and stresses that AWS will "drop everything" the instant it sees a need to work on reliability and security. It has servers clustered in eight locations - four in the US plus Singapore, Tokyo, São Paulo, Brazil and Ireland - and Mr Jassy said that the group's "rare" outages happened in only one place, meaning clients who spread their work around did not suffer. Amazon's cloud business in many ways has replicated the model of its retail operations. It identified inefficiencies that made a sector ripe for reinvention; it used technology to create flexible systems that were easy to expand; and it set rock bottom prices that yield slim profits but attract a lot of business. Noting that older IT companies often have gross profit margins of 70 per cent or more, Adam Selipsky, an AWS vice-president, said earlier this year: "I think it can and will be a much lower margin business than some traditional technology companies have allowed it to be." Amazon does not disclose the figures, but analysts reckon its cloud business has annual revenue of at least $1bn. Rackspace, a rival provider, has estimated that only 15 per cent of corporate IT functions are in the cloud - and Mr Jassy acknowledges that for managers "there's a certain level of comfort if you can walk down and touch the iron" of an in-house server. But he says that is destined for the same fate as the in-house power generator. "We've moved well past the stage of "Are most workloads going to move to the cloud?" to just "How quickly and which ones will go first?,"" he says.