I’m a massive fan of Amazon Web Services (AWS). The power of the Amazon.com servers and network being available to organizations small and large for a miniscule cost is brilliant. We use the following AWS services on various websites and for various other uses; Route 53 (the best DNS hosting by far), S3 (read about how S3 can boost your WordPress), CloudFront (super-awesome CDN), EC2 (for dabbling a bit in Bitcoin mining back in the day when high-performance GPU processing had viable returns) and the mighty Amazon Elastic Transcoder for converting video for distribution (yes, using Elastic Transcoder for Dad’s 70th birthday video was disproportionate and very geeky and I’m sorry Netflix if I delayed your video processing!).
What is AWS?
AWS is available as Amazon.com recognized the need early that their IT infrastructure needed to be able to handle the capacity and availability of Amazon.com operating at peak. It’s difficult however for most organizations, Amazon.com included, to manage supply and demand so that both are always constant. During the pre-Christmas rush Amazon.com will be far busier than, say mid-February. Amazon.com needs an IT infrastructure that can handle the massive demand of pre-Christmas but then the infrastructure will be under utelized in mid-February. So why not sell IT resources when they’re not being used? And so AWS was born …
Of course AWS has become more than just the IT resources that Amazon.com doesn’t need at any point in time. AWS is now a leader in IT infrastructure and particularly cloud computing and AWS now develops complex IT solutions for AWS clients.
AWS clients and competitors, combined
AWS has tens of thousands of customers. Some of the big brand names that use AWS include; NASA, Pinterest, Dropbox, Expedia, Suncorp, Shazam, Pfizer, Adobe, Citrix, Unilever, Vodafone, US Food and Drug Administration and Reddit. What is interesting is that Amazon.com / AWS have gone on to compete with various customers that use AWS services. This means that AWS is both a supplier and competitor at the same time. Netflix is a significant example of this.
Netflix vs. Amazon Prime Instant Video
Netflix provides TV and movie streaming for a set monthly cost. It’s kind of like having Foxtel on steroids for a fraction of the cost but with the advantage that TV and movies are available from any network on virtually any device. The ways that Netflix achieves this ability to stream tens of thousands of shows to tens of millions of clients on all sorts of different devices is by using various AWS services.
Netflix uses Amazon Elastic Transcoder to quickly convert a video into multiple different formats for playback on all sorts of devices and networks. The converted movies (there are many different formats for each show) are stored in S3 and then delivered using the power of the CloudFront CDN. If you’ve watched Netflix you’ll appreciate just how brilliant the playback is considering that millions of other people are likely watching the same show at the same time in all parts of the world).
Amazon Prime provides Prime Instant Video for only $99 per year which, like Netflix, allows for unlimited viewing of movies and TV shows hosted by Amazon. Amazon Prime of course is a direct competitor to Netflix which is a customer of AWS.
Customers also become AWS competitors
Customers that have started using AWS services also branch-off and create services that compete with AWS. Take Mailchimp, the very successful email Newsletter service; they started out by using various AWS services and have taken one of their critical services in-house. Mailchimp still use various AWS services including CloudFront however, when Mailchimp launched Mandrill, their transactional email system, they moved off AWS SES and started using their own infrastructure (parts of Mandrill are still use the AWS infrastructure such as SMTP and API servers). By the way, if you use WordPress, you really should use the free Mandrill account for sending of emails from your website.
All in all, the competitor and supplier relationship of AWS is interesting and seems to work well in providing end-users with quality products and services.