Many people consider Amazon a trillion-dollar firm due to its online retail dominance. However, the truth differs slightly from what people believe. Amazon incurred losses of $1.57 billion in North America and $1.28 billion worldwide. How, then, does Amazon remain in business? Amazon Web Services (AWS) has been a lifeline for the digital titan, accounting for over half of the company’s entire capitalization. Therefore, it is safe to conclude that this Amazon subsidiary has taken the computing industry by storm.
That said, what is AWS, and how did a side project at a tech giant become its backbone?
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What Is AWS?
AWS (Amazon Web Services) is a comprehensive, developing cloud computing platform offered by Amazon that combines infrastructure-as-a-service (IaaS), platform-as-a-service (PaaS), and software-as-a-service (SaaS) capabilities. AWS services may provide an organization with computing power, database storage, and content delivery services, among other capabilities.
AWS provides organizations and software developers with a variety of tools and solutions that are compatible with data centers in up to 190 countries. AWS services can be utilized by government agencies, educational institutions, non-profits, and commercial enterprises.
The AWS Origin Story: How It All Began
The most well-known origin narrative for AWS is that it began when Amazon had excess computer capacity and wanted to rent it out to other businesses. This myth persists despite not being true. The true narrative follows a winding road that could have easily ended in a ditch. It is founded on a concept that continues to govern AWS’s development.
Amazon Web Services, the company’s Cloud Infrastructure as a Service segment, was launched almost twenty years ago as a side business.
Many are astonished to hear that the beginnings of AWS can be traced back to the early 2000s when Amazon was a much different company than it is now, a simple e-commerce corporation with scalability challenges. As its e-commerce operation struggled to generate a profit, Amazon began exploring new opportunities.
Benjamin Black supervised an Amazon website engineering team in 2003. Then, Black collaborated with Chris Pinkham to improve the scalability of Amazon’s infrastructure.
Amazon offered its first service, Simple Queue, in 2004, and AWS was formally launched in 2006. AWS first offered Simple Storage Service (S3) and Elastic Compute Cloud (EC2), followed by Simple Queue Service (SQS). Throughout 2009, S3 and EC2 were launched in Europe, the Elastic Block Store (EBS) was made public, and Amazon CloudFront, a robust content delivery network (CDN), became an official component of the AWS service.
By 2010, Amazon has migrated all of its retail online services to AWS. In 2012, Amazon held its inaugural customer event in Las Vegas, dubbed re: Invent. In addition, AWS began offering certification classes for computer engineers. AWS declared profitability in Q3 2015 with $2.1 billion in revenue and became the leading cloud computing provider. Since then, AWS’s yearly revenue from cloud computing and hosting services has gradually increased.
A Pioneer in The Cloud Industry
Today, AWS is considered one of the leading cloud computing platforms in the world and is used by millions of customers, ranging from small startups to large enterprises. The company has a global footprint, with data centers and infrastructure located in various regions around the world.
However, what makes AWS such a massive player and pioneer in the cloud industry? Here’s the business value that AWS provides over its traditional cloud computing counterparts.
Trade capital expense for variable expenditure
Switching to a pay-as-you-go approach for spending, instead of paying for everything upfront, helps startups and smaller businesses expand rapidly and affordably.
Profit from enormous economies of scale
With millions of other customers utilizing AWS, you have access to a shared pool of resources, reducing your costs significantly compared to operating your own data center.
Avoid speculating about the capability
You do not need to estimate capacity in advance since you may scale up or down as much as necessary based on your needs without being limited by how much you have allocated for yourself.
Enhance speed and dexterity
Using AWS-managed services, it is possible to launch apps within minutes. With a variety of user-friendly development tools, you may initiate projects fast and effectively.
Concentrate on what matters
You can concentrate on your business use case and on delivering value to your clients, as you do not need to worry about deploying servers, maintaining the facility, or managing personnel.
Expand globally within minutes
You do not need to bother about managing hardware offshore or end-user latency issues. Through the AWS Global Infrastructure, you may launch apps near your end consumers and have them released worldwide rapidly.
The Competition Catches Up
According to Gartner, cloud computing will increase at a rate of 20% yearly through 2026, significantly faster than any other area of information technology. Despite this, AWS’s market dominance will certainly decline as its revenue increases. With a market share of 44%, AWS has a 20-point advantage over Microsoft’s 24%, although this advantage is narrowing. This disparity will be drastically decreased in the coming years if not eliminated. This is because many late adopter firms are entering the market, and many businesses will lean toward Microsoft due to their existing contractual connection with the company.
The closing of the gap with Microsoft is likely inevitable. The greatest potential challenge for AWS is to preserve the discipline that made it a global titan.
At the top of its game, larger and more powerful than its competitors, AWS must now face an enviable but formidable challenge: the curse of success. Maintaining the unbroken rigidity, or discipline, of its principles and procedures is its most important responsibility.
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Conclusion
AWS was started because Amazon needed to grow its own IT infrastructure. Since then, it has grown into a multibillion-dollar company that supports Amazon’s IT backbone. The story of AWS is a testament to the power of innovation and the impact that cloud computing has had on the technology industry. AWS has disrupted the traditional IT landscape and has paved the way for a new era of computing that is more accessible, scalable, and efficient.
Do you want to learn more about AWS and how it can help your business? Check out the AWS resource library to get all the information you need only on Whitepapers Online.
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