January 2, 2013–Haters are going to hate. Although Amazon.com started out as a small business selling books online in the early 90s, it has gone on to become a dominate player and force to be reckoned with in the retail industry by having one of the largest marketplaces on the web. Now, the hulk of ecommerce wants to dominate the web service market. And you thought Amazon.com just sold things.
In 2006, Amazon’s AWS service began offering IT infrastructure services to other businesses in the form of cloud computing. Many businesses, particularly startups, have started using Amazon Web Services (AWS) because they do not have to invest in large IT expenses to get started and the fact Amazon’s infrastructure is able to handle rapid growth. The popularity of cloud computing has skyrocketed in the last few years with big names like Hewlett Packard and Google competing with their own cloud ambitions.
In fact, Google recently hired Daniel Powers, a key sales executive involved in Amazon AWS as head of their sales department of Google’s own cloud platform. In return, Amazon sued the former VP of global sales in an attempt to restrict his work at Google and they’re concerned the executive would use his insight in Amazon’s AWS operation to benefit Google. Geekwire reported on Friday, a judge rejected Amazon’s attempt saying, “Amazon has failed to articulate how a worldwide ban on cloud computing competition is necessary to protect its business.” However, Amazon is fearful Powers will start to recruit Amazon employees to work with him at Google.
So is Cloud Computing big business for Amazon? Although AWS only produced around $1.5 billion in 2011 compared to Amazon’s $40 billion in retail, Senior Vice President of AWS, Andy Jassy, told the Sunday Telegraph newspaper recently, “At the highest levels of this company, we believe that it’s quite possible that AWS ends up being the largest business in Amazon.”
Surprised? Don’t be. If Jassy’s prediction seems unlikely, just think of how retailers must have felt about Amazon 6 years into its marketplace business compared to today. Amazon’s marketplace has come a long, long way since it’s humble beginning and we expect big things from AWS in the future.