SEATTLE — Within a few years, Amazon.com’s creative destruction of both traditional book publishing and retail may be footnotes to the company’s larger and more secretive gambit: giving anyone on the planet access to an almost unimaginable amount of computing power.
Every day, a startup called the Climate Corp. performs more than 10,000 simulations of the next two years’ weather for more than one million locations in the United States. It then combines that with data on root structure and soil porosity to write crop insurance for thousands of farmers.
Another startup, called Cue, scans up to 500 million emails, Facebook updates and corporate documents to create a service that can outline the biography of a given person you meet, warn you to be home to receive a package or text a lunch guest that you are running late.
Each of these startups carries out computing tasks that a decade ago would have been impossible without a major investment in computers. Both of these companies, however, own little besides a few desktop computers. They and thousands of other companies now rent data storage and computer server time from Amazon.com, through its Amazon Web Services division, for what they say is a fraction of the cost of owning and running their own computers.
“I have 10 engineers, but without AWS I guarantee I’d need 60,” says Daniel Gross, Cue’s 20-year-old co-founder. “It just gets cheaper, and cheaper, and cheaper.” He figures Cue spends something under $100,000 a month with Amazon, but would spend “probably $2 million to do it ourselves, without the speed and flexibility.” He admits, “I don’t even know what the ballpark number for a server is — for me, it would be like knowing what the price of a sword is.”
Cloud computing has been around for years, but it is now powering all kinds of new businesses around the globe, fast and with less capital.
Instagram, a 12-person photo-sharing company that was sold to Facebook for an estimated $1 billion just 19 months after it opened, skipped the expenses and bother of setting up its own computer servers. EdX, a global online education program from the Massachusetts Institute of Technology and Harvard had over 120,000 students taking a single class together on AWS. Over 185 United States government agencies run some part of their services on AWS. Millions of people in Africa shop for cars online, using cheap smartphones connected to AWS servers located in California and Ireland.
“We are on a shift that is as momentous and as fundamental as the shift to the electrical grid,” says Andrew R. Jassy, the head of AWS. “It’s happening a lot faster than any of us thought.”
He started AWS in 2006 with about three dozen employees. Amazon won’t say how many people now work at AWS, but the company’s website currently lists over 600 job openings. Jassy thinks AWS is probably less than 10 percent of its eventual size.