Considering Amazon’s Web Services

Business by on December 21, 2007 at 9:10 am

I’m increasingly seeing newly formed companies elect to build on Amazon’s web services. At a minimum, many startups are considering EC2/S3 (and now SimpleDB) as they make their early technology decisions.

Amazon’s launch of SimpleDB provides one of the last few remaining pieces of a web company’s basic infrastructure.

I’ve modeled out the economics of EC2/S3 and have been very impressed with how favorable they are. Not to mention the scalability benefits.

I’m also surprised that Google or Microsoft haven’t done this. But this is a low-margin business and neither Google nor Microsoft are accustomed to low-margin businesses. (Something online retailers have necessarily grown quite comfortable with)

Microsoft has the most to lose at the moment - EC2 only supports linux images. If I were at MSFT, I’d be funding Amazon’s efforts to enable EC2 Windows images.


  1. Marcelo Calbucci — December 21, 2007 @ 9:32 am

    It’s not like Microsoft doesn’t want Amazon to use Windows Server on EC2, is that it can’t be done because Microsoft doesn’t support Virtual Machines the way Linux does and it has some serious licensing limitations.

    However, Microsoft is working to ship Windows 2008 with HyperVisor (I think that is the name) that will enable it to work on Virtual Environments like that and I know Microsoft is re-working their licensing model to allow people to pay on a per-hour basis for the usage of Windows.

    In other words, you should expect Amazon EC2 for Windows on the second half of 2008.

  2. Bert Armijo — December 21, 2007 @ 10:22 am

    Utility computing is definitely on the uptick. However, before diving in with Amazon you should recognize that using EC2, S3 and SimpleDB requires a significant amount of coding that will lock you into those services. Services like, on the other hand, operate using existing middleware like MySQL, JBoss, firewalls and load balancers so there’s no lock in and you can get up and running without rewriting code.

  3. Steve Severance — December 21, 2007 @ 2:57 pm

    Amazon is just helping ensure that linux technologies will remain the defacto standard for new companies. I love and think it is an awsome technology but now the idea of paying for software as a startup seems very foreign to me know. Only a small percentage of modern web companies run Windows on their servers. I know JB was one of them.

    Microsoft still does not have a good distributed computing story which will continue to hurt them as web companies (and others) become increasingly data intensive.

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