There and Back Again: Zynga's Tale With Amazon's Cloud

Zynga, which somewhat-famously abandoned Amazon's cloud computing services in 2011 for its own in-house data centers, has now decided to reverse course. The company let slip in its earnings call this past Wednesday that it was planning to scuttle its data centers—in an effort to help cut the company cut out $100 million of overall spending—and move back to Amazon's cloud computing services.

The move is a fairly dramatic departure for Zynga, given the topsy-turvy relationship it has had with Amazon over the past few years. As of the beginning of 2011 or so, roughly 80 percent of the company's infrastructure was hosted on Amazon's public cloud. That changed pretty quickly that year, as Zynga executives quickly realized that the company could do a better job scaling to meet its specific mobile gaming needs using its own infrastructure.

According to reports at the time, Zynga could allegedly spin up 1,000 new servers in one day's time, and switching from Amazon to its own data infrastructure allowed the company to cut one out of every three physical servers—a good cost-savings measure, certainly. And Zynga didn't really abandon Amazon entirely, per se. The company built its internal infrastructure to work in conjunction with Amazon's cloud services, so it could tap into Amazon's cloud computing as a great backup option in case it needed even to deal with even more unexpected demand.

"We couldn't get power fast enough. We couldn't get servers fast enough. We just couldn't scale our infrastructure to match the needs of FarmVille," said former Zynga CTO Allan Leinwand, at the time, as to why Zynga was moving away from Amazon.

As the company continues to struggle with the unpredictability of online gaming—both of the Facebook and mobile variety—Zynga is having to make more difficult choices about the most cost-effective ways to do business. According to The Wall Street Journal, Amazon has cut costs on its cloud computing service since Zynga's shift over to its own infrastructure; that, and Amazon's additional flexibility for provisioning new servers has made it a more attractive option to Zynga than it previously might have been.

"There's a lot of places that are not strategic for us to have scale and we think not appropriate, like running our own data centers. We're going to let Amazon do that," said Zynga CEO Mark Pincus on Wednesday's conference call for Zynga's first-quarter earnings report.

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Zynga's move comes in conjunction with the company's announcement that it will be reducing its workforce by 18 percent by the fourth quarter of the year, as it works to restructure and turn around its ongoing financial losses.

"In order to win, we need to return to our entrepreneurial roots with leaders and teams empowered to drive outcomes. We've seen that across our industry and in the early days at Zynga, tighter, more nimble teams can drive faster innovation and deliver more valuable experiences for our players," Pincus said.