"Amazon VPC enables enterprises to extend their existing management capabilities such as security services, firewalls, and intrusion detection systems to include their AWS resources," Kinton writes.

The Burton Group did give Amazon high marks for scalability and said it offers adequate performance. EC2's core strength is the ability to easily provision and load-balance virtual machine images, and compute-intensive applications that have small data sets and are built for parallelism will work well in the service, the analyst firm says.

However, Burton Group also says Amazon's management tools do not integrate adequately with the management tools used by enterprises today. EC2 is often a good fit when organizations need to defer large capital expenses, but Burton Group says the service is still not suitable for applications that store sensitive information, require identity management, high degrees of availability and high rates of I/O transactions.

In the Burton Group's opinion, the bottom line is that "Today, EC2 is a good fit for stateless, parallel, transient, scale-out applications. But gaps in EC2's security and availability, poor enterprise management integration, vendor lock-in potential, and input/output (I/O) costs prevent organizations from using EC2 for applications that process vast numbers of transactions, house highly sensitive data, have low recovery point objectives, and require system failover to save application state."

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