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.

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