CHAPTER 1
The Digital Economy's Challenges, Opportunities, and Relevance of AWS

Digital transformation isn't a technology makeover. It's a business revolution.

-Kaan Turnali

It's a fact that the expansion of the digital economy is accelerating, it's affecting industries and businesses worldwide and confirming its disruptive nature.

Businesses will have to adapt to the changes and requirements of their competitive environment.

Although the habit in IT is to overlook business considerations in favor of rapid technology implementation, the fact is, if you don't understand how the digital economy impacts your company, chances are that you will miss out on the benefits of going digital and fail.

This disruptive digital economy affects your industry and by extension your company's business and operational models; without a 360-degree view into how far your work organization, processes, and underpinning IT have been made irrelevant, the only thing you'll get is a technology platform disconnected from your businesses' priorities.

Make no mistake, without a big picture mindset that highlights not only the challenges but also the business opportunities that you can take advantage of using cloud-based solutions such as Amazon Web Services (AWS), there is no way that your company can survive the economic crisis.

This chapter discusses the expanding digital economy's challenges and opportunities, as well as its impact on the business and IT; it highlights the benefits that businesses can derive from cloud-based solutions, including AWS, to build successful digital products and services development organizations.

Understanding the Digital Economy's Impacts

We're in the midst of a pandemic that's confirming four trends that industry experts have been observing in connection with the digital economy. Businesses will deal directly with their industry's disruption, and tackling issues head-on including work from home, ecommerce, data science, and innovation are among the competitive advantages they will need to survive and thrive. These trends are the new business normals. Let's discuss them now.

Surviving Disruptions Are Your Business's Primary Challenge

The first new normal is the notion that the conditions for frequent industry disruptions are here to stay. The reason is that the world is in the midst of a wave of innovation that's expected to last for decades. This will lead to repeated disruptions forcing businesses to adapt. That's what is meant by digital disruption and that the COVID-19 crisis should be understood as an industry disrupter.

As you can see in Figure 1.1, there's a correlation between the pandemic and ongoing job destruction. In 2020, in the United States and France, unemployment hit a yearly total of 8.9 percent, in Italy 11 percent, and in Brazil 13.4 percent. As you probably have realized, surviving industry disruptions will be part of your business challenges over the next three to five years.

Figure 1.1: COVID-19 impact on unemployment

Source: International Monetary Fund (IMF)

Understanding the Digital Economy's Opportunities

The second new normal is the emergence of work from home, ebusiness, data science, and innovation as the digital economy's opportunity enablers. A quick look at the handful of companies doing well in this crisis shows that in addition to competitive pricing, superior customer experience, and short time to market, they rely on these four pillars.

As to work from home and the related collaborative technologies, you must keep in mind that these are the competitive assets that your business needs to retain staff and preserve production capacity.

With regard to ebusiness, consider that having such an infrastructure is another asset; it allows the business not only to adapt to the emerging digital economy but also to compensate the activities destroyed by the economic crisis.

Data science capabilities relate to utilizing and analyzing data to inform or enhance the company's processes, decision-making, and even revenue model.

Innovation is the ability of your organization to take advantage of technology, including AWS, to develop highly profitable digital services that guarantee superior customer experience, differentiate your company, and help it reap profits.

Work from home, ebusiness, data science, and innovation will be discussed throughout this book. For now, what you need to remember is that they're the foundation of the digital transformation strategies that will help your organization succeed in the highly competitive environments that are taking place around the globe.

The next section elaborates on the theme that technology, particularly AWS, provides the levers that businesses need to survive and succeed in this disruptive digital economy.

Surviving the Disruptions: The AWS Solutions

Last but not least of these new normals is the emergence of leading cloud solutions including Microsoft Azure, Google Cloud, and, specifically, AWS, the topic of this book. They're the hub of successful digital business models and are essential for implementing the competitive advantages discussed previously.

The AWS Universal Architecture: Simplifying AWS Understanding

The AWS Universal Architecture is a logical cloud architecture model whose objective is to facilitate AWS learning and understanding.

AWS HERO AWARD

The AWS Universal Architecture is an achievement of this book's author who earned the AWS Hero 2020 award for the best contributions to AWS practices.

As illustrated in Figure 1.2, the AWS Universal Architecture conceives AWS through four components including infrastructure as a service (IaaS), platform as a service (PaaS), innovation as a service, and AWS integration. Each building block supports specific cloud functions; IaaS provides virtual infrastructure resources over the internet while PaaS provides complete application development platforms. Building blocks are composed of what is referred in this book as AWS extended services. Extended services are aggregations of formal AWS services that perform specific functions such as computing, networking, security, or storage.

• AWS IaaS
• AWS PaaS
• Innovation as a service (INNaaS)
• AWS integration

Figure 1.2: Overview of the AWS Universal Architecture

These features effectively enable the work from home, ebusiness, data science, and innovation capabilities. Here is what you need to know about the AWS Universal Architecture fundamentals.

Navigating AWS IaaS Building Block

Think of the AWS IaaS building block as the representation of your organization's virtual datacenter; it acts as the virtualized facility that hosts and provides three categories over the Internet of AWS virtual infrastructure resources including compute, network, and storage.

AWS Compute Resources

The objective of the AWS compute resources is to host and run applications efficiently that support your business activities including customer use of digital services. Examples include Elastic Compute Cloud, Elastic Load Balancing, and Containers. Let's briefly discuss them.

Amazon Elastic Compute Cloud (EC2) by analogy acts as a virtual server in the AWS environment to provide secure, resizable computing capacity. Its primary goal is to host and run applications supporting the business activities including customer use of digital services. EC2 has the same features as physical servers including CPU, memory size, internal storage, and network interface. Amazon Machine Image (AMI), which defines the EC2's software configuration, and the instance type, which describes its computing power configuration, are what should matter to you. The instance type provides eight families of computing power configurations, each of which are comprised of combinations of CPU, memory, storage, and networking capacities. Examples of EC2 benefits are as follows:

• Contribution to your organization's competitive pricing resulting from the cost saved due to EC2's affordability
• Superior customer experience with your organization's digital service resulting from robust networking and security due to the EC2 location in Amazon Virtual Private Cloud (VPC)
• 99.99% availability of your organization's digital services
• Wide array of computing capacity and software configurations

AWS Elastic Load Balancing (ELB) deserves the same attention; it's the load balancing service for AWS deployments. Its purpose is to ensure superior customer experience with applications and digital services by increasing their availability and fault tolerance. In addition, it builds on health check mechanisms to monitor the health of your computing resources and sends requests only to the healthy ones.

ELB distributes incoming application or network traffic across the AWS resources involved in providing optimized and secure computing capacity such as EC2 instances and containers.

ELB scales your load balancer as traffic to your application evolves. Accordingly, it adds and removes compute resources as your needs change. Examples of ELB benefits include the...