Amazon Web Services launches
“In 2006 Amazon began renting out storage (S3) and computers by the hour (EC2) over the internet: the start of cloud computing as a business, so start-ups no longer had to buy their own servers.”
On March 14, 2006, Amazon, the online shop, began to rent out storage over the internet. The service, Amazon S3 (Simple Storage Service), let any programmer keep any amount of data on Amazon's machines for 15 cents a gigabyte a month, with no minimum fee. On August 24 it added EC2 (Elastic Compute Cloud): virtual computers rented by the hour, for 10 cents an hour, that could be started in minutes and switched off when they were no longer needed. Together they started cloud computing as a business. A young company no longer had to buy servers, rent space in a data centre and guess its growth in advance: it could begin with a credit card and grow, or shrink, on the same day.
The idea grew out of Amazon's own problems. Around 2000 to 2003 the company kept hiring engineers, but its projects did not get faster, because every team built its own databases, servers and storage. Amazon rebuilt its systems as services that talked to each other through documented interfaces, and in 2003, at a meeting of its executives at Jeff Bezos's house, Andy Jassy, then Bezos's chief of staff, and the others saw that running reliable, cheap computing had become one of the company's core skills, and that other developers might pay for it. The same year two infrastructure managers, Chris Pinkham and Benjamin Black, gave Bezos a short paper that ended with the idea of selling virtual servers. Pinkham went home to South Africa, and his team at Amazon's new development centre in Cape Town built EC2.
The name is older than the services: in July 2002 Amazon had opened its product catalogue to outside programmers as 'Amazon.com Web Services', and the unit kept it; its first piece of infrastructure, a message queue called SQS, went into testing in November 2004.
Developers came quickly. The photo site SmugMug moved its pictures to S3 within a month and reported in November 2006 that it had saved about $340,000 in seven months. Dropbox launched in 2008 with its users' files stored on S3, and after a database failure stopped its DVD shipments for three days in August 2008, Netflix began moving its systems to AWS, a move it finished only in January 2016. Two weeks before EC2 appeared, Google's chief executive Eric Schmidt had used the words 'cloud computing' at a conference, and the term stuck to what Amazon was selling. Rivals followed slowly: Google App Engine opened in April 2008 and Microsoft announced Windows Azure in October 2008. That month EC2 left its test phase with a promise of 99.95 percent availability, and in December it opened a second region, in Ireland.
AWS became Amazon's most profitable business. Amazon first reported its results separately in April 2015: $1.57 billion of sales in three months and an operating profit of $265 million, which Bezos called 'a $5 billion business'. By 2023 it held about a third of the world's cloud market, ahead of Microsoft and Google, and earned close to half of Amazon's operating profit; Jassy, who had led it from the start, succeeded Bezos as Amazon's chief executive in 2021. Northern Virginia, home of the first AWS region, became the largest cluster of data centres in the United States, and the artificial-intelligence services of the 2020s, Amazon's own among them, are sold to companies through the same rented cloud.
What happened
- 2003
At a retreat of Amazon's executives at Jeff Bezos's house, an exercise to list the company's core skills, meant to take 30 minutes, runs much longer: besides selling and shipping, they find they have become good at running computing, storage and databases, and cheap, reliable data centres. Over the summer and autumn Andy Jassy, Bezos's chief of staff, and the others come to see such services as an 'operating system for the internet' that others could build on.
Chris Pinkham, head of Amazon's infrastructure, and his network manager Benjamin Black write Bezos a short paper on a fully standardised, automated infrastructure built on web services; near the end it raises the idea of selling virtual servers as a service. Bezos likes much of it.
Pacific Medical Center building (now Pacific Tower), 1200 12th Avenue South, Beacon Hill, Seattle: Amazon's headquarters while AWS was planned and launched- 2004
Early in the year Bezos asks for a fuller plan for virtual servers; the team writes the mock press release and question list with which Amazon starts a product. Pinkham returns to South Africa with a lead developer to build EC2, and Amazon opens a development centre in Cape Town that will make the technology behind it.
Cape Town: Amazon's development centre, opened in 2004, where Chris Pinkham's team built EC2Amazon Web Services opens its first infrastructure service for testing: the Simple Queue Service (SQS), a hosted queue that passes messages between the parts of a program. Six days later Jeff Barr starts the AWS blog.
- 2006
Amazon launches S3, 'storage for the Internet': any number of objects of up to 5 GB, kept on cheap ordinary machines in a system built to treat failures as normal, for 15 cents a gigabyte a month and 20 cents a gigabyte moved, with no minimum fee. Andy Jassy is vice president of AWS. Berkeley's Stardust@Home project is among the first users, storing 60 million images of a NASA dust experiment for volunteers to scan.
Google's chief executive Eric Schmidt describes an 'emergent new model' at an industry conference: data and services kept on servers 'in a cloud somewhere', which he calls cloud computing. The phrase, used by Compaq planners as early as 1996, now spreads.
Amazon announces EC2, the Elastic Compute Cloud, in a limited beta: a virtual computer equal to a 1.7 GHz Xeon processor with 1.75 GB of memory and 160 GB of disk, built on the Xen virtual-machine software, for 10 cents an hour, ready in minutes. It runs in Amazon's first data-centre region, in Northern Virginia. Jeff Barr announces it the next day from a beach holiday in Mexico.
Ashburn, Loudoun County, Northern Virginia: AWS's first data-centre region (2006), later named US East (N. Virginia)SmugMug's Don MacAskill publishes his figures: since moving to S3 around April 14, his photo site has grown from 64 to about 110 million pictures, avoided $423,686 of disks and spent $84,255 on S3, a saving of $339,430 in seven months.
- 2007
At O'Reilly's Emerging Technology Conference in San Diego, Amazon's chief technology officer Werner Vogels speaks on building a 'web-scale computing' architecture for businesses whose demand rises and falls, the promise of S3 and EC2.
Bezos's letter to shareholders, filed with the SEC, presents AWS as a new business for a new kind of customer, software developers: ten web services and more than 240,000 registered developers, aimed at the storage and computing power every developer needs.
Pacific Medical Center building (now Pacific Tower), 1200 12th Avenue South, Beacon Hill, Seattle: Amazon's headquarters while AWS was planned and launched- 2008
Google opens a preview of Google App Engine, which runs developers' web applications on Google's machines, to the first 10,000 who sign up, at an evening event called Campfire One; TechCrunch calls it a full competitor to Amazon's web services.
A major database corruption stops Netflix from shipping DVDs for three days. Netflix decides to leave its own data centres for AWS; the move, which rebuilds almost all of its software, takes until January 2016.
Netflix headquarters, 100 Winchester Circle, Los Gatos, California: Netflix began moving its systems to AWS after its database failure of August 2008After its debut at the TechCrunch50 conference in San Francisco, Dropbox opens to the public. Its users' files are stored on Amazon S3: Dropbox was, in its own later words, an early adopter of S3.
EC2 leaves beta after two years and gets a service level agreement promising 99.95 percent availability within a region; it also starts to run Microsoft Windows Server and SQL Server, from 12.5 cents an hour. Customers named include Eli Lilly and Autodesk.
Ashburn, Loudoun County, Northern Virginia: AWS's first data-centre region (2006), later named US East (N. Virginia)In Los Angeles, Microsoft's chief software architect Ray Ozzie announces Windows Azure, a cloud platform of computing, storage and networking in Microsoft's data centres, at first as a limited preview for developers.
Los Angeles Convention Center: Microsoft announced Windows Azure here on October 27, 2008EC2 opens a second region, in Europe, with two Availability Zones; its machines are in Ireland. European companies can now keep their computing and data inside the EU, close to their customers.
