Note from My Mom: Did You Know that Amazon's in the Hosting Biz?

My mom - who's a literature professor in Taiwan - sent me a link to this article (sorry; it's in Chinese). It's about Amazon's S3 and EC2. Now that Amazon's selling hosting, she asked, is there room left for anyone else in the market? After all, they're so far ahead in terms of name recognition. Consumers from all over the world buy stuff from their site. If she had to choose, she'd trust Amazon over a hosting-only provider who doesn't run a huge retail business on its own technology.

Now that's an interesting perspective. In contrast, my web hosting friends like to talk about core competency. They're in the business of running data centers; Amazon isn't. They're experts on maintaining networks; SalesForce and MySpace aren't.

But in this day and age, can hosting still be considered a stand-alone core competency? Where's the secret sauce, after all? Any company can buy state of the art gear and make hard to refuse job offers to experienced  network engineers?

Microsoft and Google, for instance, reportedly have $900 million and $750 million budgets for their rumored Texas/South Carolina facilities. Which hosting provider can afford that kind of capex? And on a smaller scale, Zoho's not only built a suite of web office apps but the grid infrastructure that its hosted software runs on.

It seems hosting has become more of a basic skill, a common denominator among companies that sell products or offer services through the Internet. Sure - pure play hosting providers acquired the knowhow first, but being first hardly guarantees everlasting preeminence? Jay Adelson, for instance, took the expertise he gained at Equinix to Digg. He's not the first to have crossed the web host/outside world boundary, and he won't be the last.

So maybe hosting companies need to redefine what they're in the business of, particularly since  in many cases their business models involve competing with Google for Google traffic and competing against free with monthly fees?

Comments

[Santosh]

Sun's Greg Matter thinks on similar lines "The World Needs only 5 computers" http://blogs.sun.com/Gregp/entry/the_world_needs_only_five.

The interesting thing about Amazon EC2 and S3 is that it was never intended for hosting applications, but to provide on-demand computing power (e.g. scientific applications). EC2 falls quite short of providing a complete solution to hosting needs. You can have a look at their devel. forum to confirm.

- Santosh

[Isabel Wang]

Wow - very interesting post. Thank you!!

Back in October, when Salesforce released its APEX programming language and Amazon opened up its fulfillment service (they'll warehouse/pack/ship physical inventory for you), I started thinking that hosting as a standalone service seems pretty incomplete. After all, Salesforce = hosting + customizable applications. Amazon.com = hosting + logistics. But I hadn't taken the idea as far as Greg has, and what he says (about consolidation of Internet computing into a handful of major platforms) does make sense.

I've spent a little bit of time looking through EC2's documentation. As of a month ago, it didn't support static IPs, didn't allow you to run a script on instance termination, and didn't offer any protection against data loss in case an instance is unexpectedly terminated (Amazon recommends that you not rely on one single instance for reliability). So no, it's definitely not a complete hosting solution - yet. But it is still very new.