SmoothSpan Blog

For Executives, Entrepreneurs, and other Digerati who need to know about SaaS and Web 2.0.

Amazon is the Hardware and OS Vendor of SaaS

Posted by Bob Warfield on May 27, 2007

Continuing the “Total SaaS Enterprise” theme, where every aspect of computing in an enterprise is purchased as SaaS except, perhaps for the laptops and internet connection (but then see!), how do Amazon’s Web Services fit in?

AWS offers several services at this time.  The ones I want to talk about are EC2 (the “Elastic Computer Cloud”), S3 (“Simple Storage Service”), and SQS (“Simple Queue Service”).  Using EC2, one can get control of individual machines roughly equivalent to  a 1.7Ghz x86 processor, 1.75GB of RAM, 160GB of local disk, and 250Mb/s of network bandwidth.  These machines are paid for by the hour at a rate of 10 cents an hour, with additional charges for connectivity outside the Amazon world.  Communications inside, between EC2 machines or S3, are free.  S3 offers the equivalent sort of service for bulk storage, offered at a rate of 15 cents per gigabyte per month, with charges to move data in and out of S3, but, cleverly, it is cheaper to move data in than out.  Lastly SQS, is a messaging system, that charges microcents to send reliable messages between processes that are queued.  For example, it would make an effective way for your EC2 machines to communicate with one another, or perhaps for machines outside the Amazon world to communicate into their EC2 resources.

What a cool concept!  And in fact, despite the fact it is relatively new, it has captured the imagination of many developers out there.  In fact, when I checked this morning, I got more hits on Amazon EC2 than I did Salesforce AppExchange on Google, despite the fact AppExchange has been available for much longer and EC2 is still in early beta test.

I got to thinking about the whole concept, and I like it a lot.  When looking at where to place it in the pantheon of SaaS offerings, it seems to me that what Amazon is offering is the equivalent of what Hardware and OS vendors offer under perpetual license.   The difference is you don’t have to install it, pay for HVAC to cool it, and so on.  The classic advantages of SaaS are available even for raw hardware. 

So my elevator pitch for Amazon is “Amazon Web Services makes it the SaaS of Hardware and OS vendors”.

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