Complete business guide to the world's largest provider of cloud services


A few brilliant strokes of ingenuity, combined with a large dose of capitalism, made the e-retailer into the world’s cloud services leader. What’s remarkable is how little of what this leader does is generally understood.

The company most associated with “the cloud,” in the minds of the general public, is Amazon, which happens to be the world’s largest e-retailer. Today, Amazon is the world’s largest provider of computing services accessible through the web from globally distributed servers in highly automated data centers.

Here’s what we mean by that: When a computing service is made available to you anywhere in the world through the web, on servers with functions that have been leased by a publisher, software producer, or other private customer, there’s a 34 percent chance (according to analyst firm Synergy Research Group) that this service is being hosted on Amazon’s cloud. There’s only a 15 percent chance that it’s hosted on Microsoft’s Azure cloud.


What Amazon AWS does, generally speaking.

Before we spout forth a fountain of fabulous terms such as “cloud infrastructure” and “virtual machine,” let’s try to explain what this AWS thing does, in terms even a CEO could understand.

What is cloud computing? Everything you need to know from public and private cloud to software as a service

An introduction to cloud computing from IaaS and PaaS to hybrid, public and private cloud.

Up until the mid-2000s, software was a thing you installed on your hard drive. It was intellectual property that you were granted the license to use, and either the entirety of that license was paid for up front, or it was subscribed to on an annual “per-seat” basis.  A corporate network (a LAN) introduced the astounding technical innovation of moving that hard drive into a room full of other hard drives; otherwise, the principal idea was not much different. (Microsoft thrived in this market.)

The first truly brilliant idea that ever happened in corporate LANs was this: An entire computer, including its processor and installed devices, could be rendered as software. Sure, this software would still run on hardware, but being rendered as software made it expendable if something went irreparably wrong. You simply restored a backup copy of the software, and resumed. This was the first virtual machine (VM).

Now you could install the applications you needed to run on the virtual machine rather than a physical machine.  Being virtual meant it could run anywhere, and soon, it became possible to relocate a VM between processors without noticeably affecting how the application on the VM was running.

If a business could install a web server on a virtual machine, it could attain the freedom to run those web servers anywhere it was practical to do so, rather than from the headquarters basement. The first great cloud service providers — Amazon among them — built their business models around hosting the virtual machines that ran their web servers, and selling that hosting for a time-based fee rather than an expensive license. Customers only paid for what they used, thus making high-quality service feasible for small and medium-sized businesses for the first time.

What “infrastructure” and “service” mean in the public cloud context

In any global economic system, the term infrastructure refers to the layers of services and support systems upon which the more visible components of the economy are based. Amazon Web Services, as was evident from the division’s original name, enables websites to be hosted remotely. Since its inception, though, AWS has grown into the world’s principal provider of virtual infrastructure — the operating systems, hypervisors, service orchestrators, monitoring functions, and support systems upon which the economy of the public cloud is based.

We use the word “service” quite a bit in this article, though it’s important that we use it intentionally rather than a word that just means “stuff” or “things”, or the way “content” is used to refer to what you read on a website. AWS provides the following principal services:

  • Infrastructure-as-a-Service (IaaS).  AWS sells access to VMs that are configured like real computers, only rendered as software. You manage them through the web, and you can see what their displays would produce if they were real computers with monitors attached. But web servers don’t really need monitors. They can send the HTML, CSS, and JavaScript code that web browsers need to assemble webpages, and to reproduce programs that you run from browsers (for example, Google Docs). Besides flexibility, what makes IaaS a lucrative, marketable service is that customers only pay for the resources (bandwidth, storage, processing) that they use, when they use it — like commodities.
  • Software-as-a-Service (SaaS). On your PC, your web browser has become a rendering vehicle for applications delivered to you from a cloud provider. On your smartphone, its operating system can perform that same role, and the result can be an app whose core functionality exists in the cloud, rather than being installed on the device. In both of these cases, the software is run on the server and delivered to your device (the client). Portions of this application are executed in both places, with the internet serving as the delivery medium.
  • Platform-as-a-Service (PaaS). When your intention is to deliver software to your customers through the cloud, it becomes more practical to use tools that are located in the cloud to build that software effectively on-site (“cloud-native applications”).  It also becomes feasible to optimize the billing model for that software — for instance, by charging only for the customers’ use of specific functions built on the cloud platform.
  • Object data storage. Although it’s fair to say Amazon did not create the cloud, it’s equally fair to say it did create the market for bulk data storage and delivery. By this, we mean not just files but the mountains of structured and unstructured data that may constitute a database, or may not yet have coalesced into a database. The impetus for this part of the cloud revolution was AWS charging for the space that data actually consumed, rather than the volumes or hard drives that contain it. Now, AWS offers a variety of data service options best suited for the different ways that customers intend to use cloud-based data.

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