Don't Call Them A Store


Everyone know that Amazon sells books and music and other things that arrive in the post.  But did you also know that they also sell all the services that they use to sell their products?  You can buy hard drive space (S3), computing ability (EC2), payments (FPS) and a whole bunch of other products - and it's on-demand: it scales up and down as you need it.

What's fascinating about this, is that Amazon is becoming a company that sells a giant infrastructure that you can rent rather than building.  (In business jargon, your capital expenditures become a variable cost - very nice)  More importantly, it's the best infrastructure in the world (okay, Google's may be better, but you can't beat them).

I attended The Startup today; it was an Amazon Web Services evangelism meeting in New York at the Cooper Union.  I'm interested in migrating a lot of NeedTuNo's backend over to Amazon and wanted to see what's going on.

Here are a couple of interesting points to consider:

-Amazon launched web services as when they opened up some of their selling features to their sales partners, they found that conversion rates went up 30-35% (versus using Amazon-provided tools)

-Unsurprisingly, people came up with more creative uses of their services when they were able to access the API than when Amazon tried to come up with services by themselves

-The Pentagon was going to create a prototype of some software but it was going to cost $30K for servers - they used EC2 instead and it cost...$5.  (Yes, 500 cents)

Wednesday, September 26, 2007

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