Amazing Amazon

I remember back in 2003 when I had a meeting with the then CTO of Amazon for a couple of hours. He was narrating his vision of SOA (Service Oriented Architecture), where individual business or programming functions (called services) can be stacked up in libraries and get invoked as and when required. This notion of re-usable services was not new (remember subroutines from the mainframe era or stored procedures from the client-server days?).

Subsequently we called them “web services” because they were loosely coupled applications that can be exposed as services and easily consumed by other applications using Internet standard technologies. Phrases such as XML (EXtensible Markup Language), UDDI (Universal Discovery, Description, Integration), WSDL (Web Services Definition Language), and SOAP (Simple Object Access Protocol) were new lexicons then. These were URL addressable resources that could exchange information and execute processes automatically without human intervention. Oh yes, we talked about how the equivalent of a phone dial-tone is evolving to a personal digital dial-tone (Internet) to  an application digital dial-tone (web services).

I wondered then – why a book-selling company like Amazon was speaking this language, so far off its core business? Then the CTO explained to me that Jeff Bezos wanted to monetize the excess capacity from his massive data center investments which were idle like 70% of the time. Hence the starting point was S3 (simple shared storage), where savings of the order of one-hundredth could be achieved. No one believed such claims initially, but Amazon continued its journey into “cloud computing” with offering computing power as a utility with EC2 (elastic computing cloud). I left that meeting quite amazed, to say the least with skepticism in my mind.

Fast forward 12 years. Amazon’s AWS (Amazon Web Services) is the de-facto leader in cloud infrastructure provisioning business. It is both at IaaS (Infrastructure as a Service) and PaaS (Platform as a Service) levels. Amazon became the harbinger of “Cloud Computing”, taking that laurel away from leaders such as IBM, and HP. In 2015, the AWS business brought $8B in revenue. Others such as Microsoft’s Azure or IBM’s Bluemix or Oracle’s Cloud offering are all playing catch-up to AWS. Google’s cloud is yet to be a serious contender for enterprise computing. No wonder, they have hired Diane Green (VMWare founder) as the new cloud czar with a huge financial package.

Some predict that AWS will become the largest business unit at Amazon over time. Although I just read that they are after a $400B business, that of transportation, owning their own delivery services to replace Fedex and UPS (recently Amazon has been getting its own freight liners, trucking fleets, etc.). Amazon is secretive on its new business, just as back in 2002-2003, they were way ahead on their thoughts on cloud computing. Bezos is now part of the $50B+ club (top five richest people).

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