Cloud-based computing services aren’t new by any meaning of the word, but only in the past few years have we been hearing an increasing buzz in the community on the subject. Big names like Microsoft and Google have already established successful cloud computing platforms while others like Apple and their iCloud service are just around the corner. Reuters is reporting that Washington-based online retailer Amazon suspects that “the Cloud” will be responsible for their next billion-dollar business.
Amazon is primarily known for their online store but the truth is that they have been offering cloud computing to business for many years. After the dot-com bubble burst in 2000, the company realized that their servers were grossly unutilized as loads rarely stressed the powerful hardware. In an effort to put the unused processing power to good use, the company started Amazon Web Services (or AWS) in 2006. AWS is an online cloud computing service based on utility computing which is a metered service that charges the customer for only the amount of resources they need and doesn’t require a contract.
Up to this point, little has been released about the internal workings of AWS. We do know that AWS consists of two major components. S3 sells data storage while EC2 sells computing power. Amazon claims to have hundreds of thousands of customers already enrolled in the program, spanning more than 190 countries worldwide.
"While still very small for Amazon (likely about $750 million revenue run rate), given the size of the market opportunity and Amazon's strong competitive positioning, we believe that this could soon be a $1 billion revenue segment," said Citigroup Internet analyst Mark Mahaney in a note to investors.
Another industry analyst, Doug Anmuth from J.P. Morgan, thinks that AWS revenue will reach as high as $2.6 billion within four years as the need for off-site data centers increase.