{"id":539,"date":"2006-09-29T08:24:15","date_gmt":"2006-09-29T14:24:15","guid":{"rendered":"https:\/\/www.roughtype.com\/wp\/?p=539"},"modified":"2006-09-29T08:24:15","modified_gmt":"2006-09-29T14:24:15","slug":"amazons_utility","status":"publish","type":"post","link":"https:\/\/www.roughtype.com\/?p=539","title":{"rendered":"Bezos on Amazon’s utility"},"content":{"rendered":"

In an interview<\/a> with Technology Review’s Wade Roush, Amazon.com chief executive Jeff Bezos discusses the company’s rapidly expanding effort to sell utility computing services. One reason it makes sense for Amazon to provide data storage and processing as metered services, Bezos notes, is that the massive computing infrastructure the company has built to run its online store has a great deal of spare capacity. “There are times,” says Bezos, “when we’re using less than 10 percent of capacity. And that is one of the advantages of doing things this way – it promises higher rates of hardware utilization. That’s a system-wide efficiency that should make everybody happy.”<\/p>\n

It may seem astounding to think that a big computing system sometimes runs at less than 10 percent of its capacity, but it’s actually the norm in the business world, where millions of private computing plants operate in isolation. And, beyond just Amazon, that’s one of the main reasons utility computing makes such economic sense. The same thing happened with electric power. When manufacturers built private generators to power their plants, they had to build enough capacity to handle their peak potential demand, or load. That meant that the vast majority of capacity went unused. When the alternating current grid arrived, allowing power to be transported over long distances, it suddenly became possible to share capacity among many users, which in turn made it possible for centralized utilities to operate at very high levels of capacity utilization, balancing their load among many users. For computing, the internet is the AC grid. Computing and electric power may be very different technologies, but the supply economics are remarkably similar.<\/p>\n

Noting that “we may all eventually do most of our computing within the cloud of computing and storage resources,” Roush asks Bezos, “Can you imagine Amazon evolving into a company that’s as famous for being a kind of Web utility as it is for being an e-retailer?” “No,” replies Bezos. “This is a completely separate business that will grow up in its own way … Today, Amazon itself is the biggest user of [our utility services] like EC2 and S3. We’ve been our own beta customers. But one day my hope is (to answer your question about the future) that Amazon will be just one of many big providers of infrastructure services, not the big provider.” In the past, I’ve written about the inevitable tensions<\/a> that arise between being a retailer and being a supplier of technology services, given the very different economics of those two businesses. If Amazon’s utility services prove successful, it will be fascinating to watch how the company navigates those tensions.<\/p>\n

UPDATE: Bezos was interviewed after a speech he gave about Amazon’s technology “guts” and how they’re being used for its web services. An MP3 of his speech is available here<\/a> and written summaries are available here<\/a> and here<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"

In an interview with Technology Review’s Wade Roush, Amazon.com chief executive Jeff Bezos discusses the company’s rapidly expanding effort to sell utility computing services. One reason it makes sense for Amazon to provide data storage and processing as metered services, Bezos notes, is that the massive computing infrastructure the company has built to run its […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":false,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2},"jetpack_post_was_ever_published":false},"categories":[1],"tags":[],"class_list":["post-539","post","type-post","status-publish","format-standard","hentry","category-uncategorized"],"jetpack_publicize_connections":[],"jetpack_featured_media_url":"","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/www.roughtype.com\/index.php?rest_route=\/wp\/v2\/posts\/539","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.roughtype.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.roughtype.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.roughtype.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.roughtype.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=539"}],"version-history":[{"count":0,"href":"https:\/\/www.roughtype.com\/index.php?rest_route=\/wp\/v2\/posts\/539\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.roughtype.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=539"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.roughtype.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=539"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.roughtype.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=539"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}