How Did Amazon Get Into Cloud Computing?

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Two decades back, Amazon was merely an online bookstore. It had the same systems and servers used by other businesses. They wanted to have a new mechanism to expand their business beyond books. By trying to power their website, they developed one of the most popular e-commerce platforms of all time. 

They also developed Amazon Web Services (AWS), which gave impetus to the cloud computing industry. It got launched around the same time as Apple brought the iPhone. AWS has redefined the way businesses use cloud computing today. In this article, we will take an in-depth look at how Amazon got into cloud computing.

How it all started

The early talks about AWS go back to 2000 when Amazon wanted to expand its operations. When they tried to introduce newer applications for serving their customers better, they got stuck due to various system issues. They had to rewrite numerous codes. Amazon then began to segregating its data sets like goods, customers, and orders. They got further segregated into security requirements.

It led to Amazon starting to rent IT infrastructure and applications to various businesses online. It enabled them to start selling other products through their website, amazon.com. Their customers soon began outsourcing their needs related to networking, storage, and servers. It gave rise to AWS.

Creation of internal systems

Amazon wanted to create merchant.com, an e-commerce service that would help third-party merchants with their online shopping website needs. However, it wasn’t a smooth ride for them to build an external development platform. One of the reasons was they did not plan well for the future. Without any scope for organized systems, they ended up creating a big mess. It proved costly for them as they had to separate different services for creating a centralized platform useful for external parties.

It was then that Amazon took steps to build the AWS business by getting rid of the mess. It was a win-win situation for them as they saw success with merchant.com and the internal developer audience. It also paved the way for better development of internal tools. Amazon began experiencing rapid growth and started hiring engineers. However, they realized that the work was still getting done slow despite the addition of resources. 

It forced Jeff Bezos and his chief Jassy to identify the problem by digging deep into it. They realized that they were far behind in terms of planning and execution of internal projects. The teams weren’t in sync and were building resources without much thought. Amazon required that it had the same infrastructure for all its teams. When they set out to create this, they realized that there is a lot more scope here.

The idea behind AWS

During an executive retreat at Jeff Bezos’ house in 2003, the team conducted an exercise to find the competencies of the company. They thought it would last for half an hour, but it stretched beyond that. The team knew its potential and how well it could manage its current business. However, they soon realized the potential they have for expanding the business. Jassy and others were aware of how good they were at running infrastructure services.

The team had also become adept at running scalable and cost-friendly data centers on a need basis. They also had to ensure that the business was efficient and lean, keeping in mind the lesser profits. It was at that time they began ideating about AWS and its scope in their business.

Internet operating system

The idea they got at the retreat was a catalyst, and the team at the Amazon soon began working on it. They wanted it to position the services as an operating system for the internet. All this was happening three years before the launch of AWS. This idea was thus in a nascent stage at that time. It also gave rise to how Amazon can build the components of this operating system. 

Upon further discovery in 2003, they realized the opportunities that exist here. The components for running the internet were yet to be built. They had a mission to build all those critical components for the internet operating system. The aim was to enable businesses to run their technology applications on Amazon’s infrastructure.

They launched the Infrastructure as a Service a few years later. There were initial hiccups, but it is a profitable business today. With the launch of Amazon Elastic Compute Cloud in 2006, AWS began marketing with a modern cloud infrastructure service. There was no competition in the initial years, which helped them occupy a significant share in the market even today. With AWS, they never imagined it would become so big. 

The growth over the years

According to Amazon, AWS had revenue of $25.7 billion in 2018. The company had almost half of the $32.4 billion sales in the global market for the infrastructure as a service. It was followed by Microsoft (15%), Alibaba Group Holding Ltd. (7.7%), and Alphabet’s Google (4%.) The growth of AWS will continue to happen in the coming years as it is all set to become one of the biggest enterprise software providers. 

AWS had sales of $7.7 billion in the Q1 of 2019, which highlighted a consistent growth pattern. They also have around $16 billion in backlog revenue for future contracts. The global cloud infrastructure revenue will also continue to increase in the future. Microsoft’s Azure cloud business and AWS will be right there at the top. Experts attribute this tremendous growth of Amazon to its leadership principles that the team closely follows.

Learn cloud computing today to secure your future

If you are interested in this technology and want to gain a foothold, a cloud computing course will be your best choice. Many online platforms like Great Learning, Coursera, Udemy, and many more can help you out in getting practical knowledge.

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