Understanding Amazon Web Services

There are two ways to look at Amazon.com: as a retailer, and as a software company that runs a retailing application. Both are accurate, and in combination they explain why Amazon, rather than a traditional computer company, has become the most successful early mover in supplying computing as a utility service. For Amazon, running a cloud computing service is core to its business in a way that it isn’t for, say, IBM, Sun or HP.

In a brief but illuminating video interview with Om Malik, Amazon CEO Jeff Bezos underscores this point in describing the origins of Amazon Web Services. “Four years ago is when it started,” he says, “and we had enough complexity inside Amazon that we were finding we were spending too much time on fine-grained coordination between our network engineering groups and our applications programming groups. Basically what we decided to do is build a [set of APIs] between those two layers so that you could just do coarse-grained coordination between those two groups. Amazon is, you know, just a web-scale application.”

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