Amazon.com is selling the computing resources originally developed to handle its own business.
Amazon.com made $10 billion in fiscal 2006 selling items in 35 product categories to some 59 million registered users around the world. To do that, dozens of data centers must process millions of transactions and terabytes of data each day.
Now, however, the company is bringing its invisible back-end operations front and center. In a series of initiatives launched over the last year, Amazon has begun to rent out parts of its IT infrastructure as Web services.
Startups in the social-networking or media-sharing arenas, for example, can use Amazon’s S3 database service to store their users’ photos and videos, rather than buying their own servers. In another service, the Elastic Compute Cloud, or EC2, business customers can offload computing-intensive tasks to temporary “virtual servers” at Amazon’s data centers. And last week, Amazon announced two additional services, Webstore by Amazon and Amazon Fulfillment, that allow outside companies to build their own commerce sites around Amazon’s software, then ship products using Amazon’s own warehousing and shipping network.
In essence, Amazon is finding ways to monetize the software and computing resources it has developed over the last 11 years to handle its own business. “There’s a big need at many companies for back-end infrastructure,” Bezos remarked. “The problem is server hosting, bandwidth management, and the like really have nothing to do with your actual business.” Amazon wants to use the Web services it’s developed to “help with some of that heavy lifting,” Bezos said.