Many people consider Amazon a trillion-dollar corporation due to its dominance in online retail. But the reality is a bit different from what people are assuming. The e-commerce corporation Amazon operated at a loss of $1.57 billion in North America and $1.28 billion elsewhere. So, how is Amazon managing to stay in business? Well, nearly half of Amazon’s total evaluation comes from Amazon Web Services, which has been a lifeline for the tech giant. So it’s safe to say that this subsidiary company of Amazon has taken the computing world by storm. These cloud computing systems were born out of the need for diversification. But before Amazon realized it, AWS became one of the most prominent and successful ventures for the company.
Amazon Web Service is an online platform that offers scalable and affordable cloud computing solutions that include server processing power, storage capability, content delivery, emerging technologies such as machine learning and artificial intelligence, and other cloud services to help businesses run and grow more efficiently. Businesses can create complex applications with AWS, which offers far greater flexibility, scalability, and dependability than more conventional techniques.
Amazon’s current market cap is $1.108 trillion. However, its retail businesses account for a fraction of that value. Its world-class cloud business played the biggest role in Amazon’s success. Furthermore, according to data from Synergy Research Group, AWS maintained its lead over rivals in the high-growth cloud infrastructure sector during the first quarter of 2022. So, let’s find out how AWS became the gold standard of cloud computing?
How It Got Started?
There are many tales regarding how AWS came to be. Approximately twenty years ago, Amazon Web Services, the company’s Cloud Infrastructure as a Service division, was introduced as a side venture by Amazon.
Many are surprised to learn that the origins of the AWS concept can be traced to the early 2000s, when Amazon was a very different company than it is now, merely an e-commerce business with scaling issues. Amazon started to look into other ventures when its e-commerce business was struggling to profit.
Back in 2003, Benjamin Black used to oversee an Amazon website engineering team. Then Black teamed up with Chris Pinkham to work on how to scale up Amazon’s infrastructure more efficiently.
In 2004, Amazon released its first service called Simple Queue, and in 2006 AWS was officially launched. AWS first provided Simple Storage Service (S3) and Elastic Compute Cloud (EC2), with Simple Queue Service (SQS) coming shortly thereafter. By 2009, S3 and EC2 had been deployed in Europe, the Elastic Block Store (EBS) had been made public, and Amazon CloudFront, a strong content delivery network (CDN), had become a formal component of the AWS service.
And by 2010, all the retail web services of Amazon had switched to AWS. Amazon hosted its first customer event called re: Invent in 2012 in las vegas. Moreover, AWS started to give certification courses for computer engineers. In Q3 2015, AWS claimed to be profitable with a revenue of $2.1 billion and became the largest cloud computing service. Since then the annual income of AWS cloud computing and hosting services has been increasing steadily. In 2021, due to their cloud services, Amazon Web Services (AWS) raised 62.2 billion dollars in revenue.
Why Are Businesses Opting For Amazon Web Services?
Along with Amazon itself, AWS is supporting industry giants such as Netflix, Dropbox, Reddit, and many other high-profile organizations. AWS has surpassed its competitors in terms of size and presence in the computing industry. In the fourth quarter of 2021, Amazon’s market share in the global cloud infrastructure market was 33 percent, still above the combined market share of its two major competitors, Microsoft and Google. Taking second place, Microsoft Azure occupies 22% of the cloud market and Google Cloud Platform holds 10% of the market. Let’s find out why these businesses are leaning towards Amazon Web Services.
Security and Reliability
Amazon Web Services is far more secure compared to any other business that is hosting its own website or cloud storage. It guarantees that the network that customers use to access your infrastructure is secure both physically and digitally. AWS supports a shared security model. This implies that security can be managed at both the client and AWS ends of the data center. A number of these centers operated by AWS are currently spread out all over the world. Plus they make sure that the data centers are monitored and maintained strictly. Besides, a mishap in one area won’t result in the irreversible loss of all data. All the data is evenly distributed, readily available, and disaster-proof thanks to AWS’ global infrastructure, which is also extremely resilient. You can identify users who have access to your resources using the Amazon IAM service.
Availability and Flexibility
Amazon Web Services’ amenities facilitate numerous data centers spread across availability zones (AZs) in various parts of the world. A zone with several data centers is known as an AZ. Any business or company will most likely choose multiple availability zones for various reasons.
With AWS, businesses can obtain a virtual environment that enables them to access the services and software needed for a particular application. Therefore, there are no limitations while using Amazon cloud services, which not only make cloud migration easier but also aid in the development of new solutions. Concerns about scaling up and down are also eliminated thanks to AWS’s ability to manage data and applications in various quantities. There are services like AWS EC2 that automate scaling and configuration processes.
Pricing
When it comes to price, Amazon Web Services can accommodate both tiny startups and established businesses. First, it provides a “pay-as-you-go model,” in which you pay for resources according to the quantity and length of time you utilize them. Start-ups and small enterprises can see the clear advantages of utilizing Amazon for their computing needs because the price of AWS is adjusted based on customers’ use. Thus, companies just pay for what service they use from AWS.
Takeways
The world before the cloud was riddled with scalability, redundancy, and significant server over-provisioning issues. If anyone intended to have any kind of digital blueprint, they would have to buy their own technology, servers, and data centers, as well as pay for all of the necessary personnel to administer it all. While AWS was founded out of the necessity to expand Amazon’s internal IT infrastructure, it has now grown into a multibillion-dollar firm that supports Amazon’s IT backbone.
