Wired spent 13 columns of fine print detailing the birth of Amazon Web Services, Jeff Bezos's scheme to rent out his online store's Web infrastructure to startups. The magazine stayed carefully on message; if you attended Bezos's talk at last Saturday's Startup School, you'll find the story extremely familiar. "You don't generate your own electricity," Bezos asks, rhetorically. "Why generate your own computing?" This is the same line Bezos has been peddling for years. Aside from the rehashed quotes, Wired did squeeze a few numbers out of a reluctant Bezos. The facts about Amazon Web Services, stripped of the hype, amount to roughly 100 words:
The transformation began when Amazon plunged into auctions. Amazon's dotcom-era server-and-database combo was staggering under the complexity. Engineers gambled on a Net-centric idea. Bingo. "We were building these services for ourselves," says [the Amazon employee] who wrote the Amazon Web Services business plan. "They could be valuable to other people." 10,000 new developers are signing up monthly, with the total closing on 400,000. The idea that AWS is about wringing extra bucks out of Amazon's data centers? "That ship sailed."AWS's 2007 revenue: $100 million. Other companies building data centers: Salesforce.com, EMC, IBM, Google. Bezos: "I'd be surprised if no one else does this. It's a really good idea!" Ace up his sleeve: Commodity business prices plunge toward the cost of production. "We've never had 35 or 40 percent margins."