AMAZON WEB SERVICES

GROUP 6, MIPAS – B

SRIRAM A027 SAMRUDDHI MODAK A043 PRERNA PAHUJA A045

PRAGYA GUPTA A067 PRASHANTH BHASKARAN D012 JAGRITI DHAWAN F017
APOORVA SOMANI H058
 Evolution and History
 Started experimenting with web services in 2002 in conjunction with the Associates group (various
businesses that advertised amazon products on their websites; drove traffic to Amazon through links and
earned 5-8% commissions)
 Amazon released its product information as APIs so that Associates websites can present it according to
their own preferences in order to drive sales
 Three main things that came into notice after API release - 1) excitement amongst developers about the

Overview of fact that Amazon was opening up its platform, 2) the innovation with which they built the front end to
merchandise the products, 3) the fact that people were building commercial applications from the start
 During the test release the developers said they wanted Amazon to open up more of its platform in

AWS addition to the products base. In retrospect, this made Amazon think and consider the possibility of using
the Internet as an OS for developing commercial applications.
 Not many elements of the Internet which would make it functional as an OS were available. Amazon
realised it could provide a lot of these building blocks
 Amazon unknowingly built the base for AWS from the very beginning by building the entire Amazon
ecosystem from scratch using technology that was deeply embedded in the system. Things like data
storage, computing, database functionality, and message were layered deep in the software stack and were
inimitable
 The company also leveraged the relationship it had built with software and hardware technology
companies which provided the parts for AWS. Just like the retail business, Amazon could capitalize on its
first-mover advantage in this technology development business as well
 In order to determine where to start, the company used three mechanisms – 1) feedback from internal
teams about the things they had to keep reinventing every time they had to build a new application, 2)
insights from business and technology leaders from across the company about a variety of Internet
applications that existed and could be used to build Amazon web services, 3) suggestions from external
developers who had been working on the Amazon API which was made available to the Associates group
 Services needed to meet a lot of requirements like reliability, scalability, low-latency, simple and fast, and
last but not the least cost-effective
 Organizational Structure

 Foundational infrastructure services team put together by Jassy

Overview of  Small, autonomous teams for each service with engineers from both
within and outside Amazon recruited to them. Each team had a general
manager and included members from both business as well as

AWS technical backgrounds

 Fresh MBA graduates put in leadership positions

The teams were responsible for defining, building, operating, and
running the service like a business with its own profit and loss statement.
 AWS Services
Simple Storage Service (S3) Amazon Flexible Payment Service (Amazon FPS)
• Storage and retrieval of data from anywhere • Collect funds electronically from customers
on the web • Offered flexibility for developers to define the
• Example: Microsoft distributed copies of Vista conditions of the transactions
softwares

Elastic Compute Cloud (EC2) Amazon Premium Support

• Resizable computing capacity in the cloud • Technical assistance to customers
• Example: Powerset Inc., cut their capital costs
by more than half

SimpleDB
• Real-time lookup & querying of structured data
• Designed to work in conjunction with S3 and
EC2
Amazon Elastic Block Storage(EBS)
• When EC2 instances were terminated, the data
Simple Queue Service
within the instance was lost
• Stores data messages as they travel between
• EBS allowed users to allocate storage volumes
applications
 Market Dynamics

The digital infrastructure market grew from $196 billion in 2006 to

$225 billion in 2009

AWS wasn’t meant to be very profitable in the short run, but had the
potential to generate an incremental $200 million in annual revenue
down the road, with 50% incremental margins
 Competition

Network
Appliance • Few of the new companies provided
subscription based online storage similar to
Dell
Computer Sun Amazon S3, and very few of these
Corp
continued to exist post the dot-com boom
Traditional
Storage Market
Competitors
• SSPs were to be big deal in future as
EMC
HP
compared to the time they were launched
Corporation
in market
IBM
• Customers slowly get accustomed to the
idea of paying for Storage as a Service
 Amazon was ahead of the
Microsoft also launched
big internet giants in in
office suites, to compete
hosting web-based
with storage as service
services for customers

Competition Google introduced App

Engine, which had a
scalable infrastructure Salesforce offered a CRM
with a custom pricing software, and later
model per user, and was launched AppExchange.
expected to compete with
AWS.
 Amazon’s Advantage
AWS believed that its services
were well positioned wrt ease of
use, pricing, scalability,
performance and ability to set
up and use.
Its complete focus was on this
one product, as it did not intend
to launch any other products in
the IT space, hence no risk of
cannibalization.
  Pricing
 Aggressive Pricing – No upfront fee, No minimum bill,
Pay-per-use model
 Tremendous response, developers liked how AWS
allowed businesses to reach market faster
 Wall Street and the press was still sceptical about AWS
and considered it to be drain on the profitability of

Challenges for Amazon

 Capacity Management & Service Releases

AWS  How elastic should AWS servers be a major concern
 Animoto grew from 20 machines to 3400 machines in a 5
days
 AWS has to be prepared to handle such demands
 Service Releases had to be well tested. A glitch in
hardware performance of Amazon S3 caused a temporary
outage
  Cloud computing would put IT departments out of business
 Amazon’s Position
 Technological competence
 Reliable and Scalable services
 First mover advantage
 Ability to execute quickly
 Competition

Looking Ahead  Challenges

 Scrutiny from capital markets
 AWS Business Model
 Driving high volume
 Utilization of products and services to reduce cost and
increase FCF

 Need to expand and broaden the mix of AWS’s customer base

 They have the core assets and unique set of skills to be leader
in cloud computing
Thank You!