Amazon Web Services Inc. (AWS) Overview

Introduction

Amazon Web Services, Inc. (AWS), a subsidiary of Amazon, provides individuals, organizations, and government agencies with on-demand cloud computing platforms and APIs on a metered, pay-as-you-go basis. These cloud computing web services provide software tools and distributed computing processing power via AWS server farms. One of these services is the Amazon Elastic Compute Cloud (EC2) platform. It gives users access to a virtual group of computers that are always online. AWS’s virtual computers simulate the hardware central processing units (CPUs) and graphics processing units (GPUs) used for processing; neighbourhood memory and Smash; Storage on SSDs and hard drives; a number of different operating systems; networking; and application software that is already installed, like customer relationship management (CRM) and web servers. Six of AWS’s North American locations are among many worldwide. Subscribers are encouraged to sign up for Amazon Web Services (AWS) because it is a faster and less expensive alternative to building a physical server farm for large-scale computing capacity. All services are billed based on usage, even though each service measures usage in a different way. Synergy Group estimates that, as of the fourth quarter of 2021, Microsoft Azure and Google Cloud held 21% and 10% of the market, respectively, for cloud infrastructure.

How it all started

AWS was established at the start of the 2000s. The idea to offer an e-commerce service called Merchant.com to help third-party retailers build their own web stores on top of Amazon’s e-commerce engine got the ball rolling. Building an external development platform proved to be much more challenging than they anticipated because, like many startups, it did not really plan for future requirements when it launched in 1994. They had unintentionally created a chaotic environment for development rather than an organized one. Untangling that mess into a set of well-documented APIs was the company’s first step toward building the AWS business at that point.

At the same time, Amazon was unhappy with the speed of its software engineering and wanted to implement a number of Matt Round’s suggestions, such as increasing the autonomy of engineering teams, using REST, standardizing infrastructure, getting rid of gatekeepers (bureaucracy), and deploying continuously. Additionally, rather than working on other projects, he suggested that engineers spend more time building software. Instead of spending 70% of its time on “undifferentiated heavy-lifting”, such as IT and infrastructure issues, Amazon developed “a shared IT platform” so that its engineering teams could concentrate on customer-facing innovation. In addition, Amazon’s infrastructure team, led by Tom Killalea, the company’s first chief information security officer, was already able to manage their data centres and associated services in a manner that was “fast, reliable, and cheap” by adapting to unusual peak traffic patterns, particularly during the holiday season, migrating services to commodity Linux hardware, and relying on open source software. It was at this point, they realized they might have something more substantial.

After Vermeulen, Bezos’ first choice, declined the offer, Andy Jassy had taken over Bryar’s portfolio by the summer of 2003 at Rick Dalzell’s direction. To begin these endeavours, Jassy assembled a founding team of 57 employees, the majority of whom were hired outside the company and came from a variety of engineering and business backgrounds; among them are Jeff Lawson, CEO of Twilio, Adam Selipsky, CEO of Tableau, and Mikhail Seregine, co-founder of Outschool. Chris Pinkham and Benjamin Black wrote a paper in 2003 on the design of Amazon’s internal infrastructure. They prepared a business case on the idea of selling it as a service. They reviewed a six-page document before deciding whether or not to proceed. They decided to move forward with the paperwork and by the fall of 2003, the first set of infrastructure components that Amazon would launch was determined to be databases, storage, and computing (which would later launch as EC2). AWS launched its first public infrastructure service in November 2004: The Simple Queue Service (SQS).

AWS launched Amazon S3 cloud storage on March 14, 2006, and EC2 followed in August 2006. “Helps free developers from worrying about where they are going to store data, whether it will be safe and secure, if it will be available when they need it, the costs associated with server maintenance, or whether they have enough storage available”, Andy Jassy, AWS founder and vice president in 2006, stated at the time. Developers can now concentrate on inventing with data rather than figuring out how to store it thanks to Amazon S3. In September 2007, AWS announced the Start-up Challenge, an annual competition with $100,000 in prizes for US-based software developers and business owners using AWS services like S3 and EC2. More than 180,000 developers applied. It was reported in November 2010 that all of Amazon.com’s retail websites had switched to AWS. Since AWS was regarded as a component of Amazon.com prior to 2012, Amazon’s financial statements did not detail its revenue. For the first time, industry observers estimated that AWS’s revenue in that year would exceed $1.5 billion. On April 30, 2013, AWS began offering a cloud computing-focused certification program for computer engineers in support of industry-wide training and skill standardization. In October of that year, AWS launched Activate, a program that allows new businesses all over the world to use AWS credits, third-party integrations, and free access to AWS experts to help them grow. AWS’s partner network (APN), debuted in 2014 and aims to support AWS-based businesses in expanding and scaling their operations through close collaboration and best practices.

How does Amazon Web Services (AWS) work?

AWS is broken up into various services; depending on the requirements of the user, each can be set up in a variety of ways. An AWS service’s individual server maps and configuration options ought to be visible to users. The computing databases, infrastructure management, application development, and security services that make up the Amazon Web Services portfolio, number over one hundred. While AWS manages the infrastructure and underlying resources, some services offer complete control. AWS takes care of the operation and security of the entire stack for other services, so all you have to do is use it. The AWS infrastructure and services are designed to meet the security requirements of the most risk-averse businesses, and all customers have access to the same features. AWS’s innovative security services are built and maintained by security experts who monitor and secure these infrastructures. These services make it easier for customers to meet their own security, compliance, and regulatory requirements.

Amazon Web Services (AWS) key financials

• Amazon.com reported that AWS was profitable in April 2015, with $265 million in operating income and sales of $1.57 billion in the first quarter.
• In the first quarter of 2016, revenue was $2.57 billion, and net income was $604 million. This was a 64% increase over the first quarter of 2015, making AWS for the first time more profitable than Amazon’s North American retail business.
• AWS now holds more than 30% of the global market, making it the most successful cloud infrastructure provider in the decade since its inception. That is a lot more than its three closest competitors, Microsoft, IBM, and Google, taken as a group. Around the same time, Amazon’s stock value increased by 42% as a result of increased earnings, of which 56% came from AWS.
• By the end of 2020, AWS’s annual revenue had increased to $46 billion from $17.46 billion in 2017.
• In April 2021, AWS reported 32% yearly growth and accounted for 32% of the $41.8 billion cloud market in Q1 2021.

With sales increasing by 37% in 2019, 30% in 2020 and 32% in 2021, Amazon Web Services (AWS) appears to have strong growth prospects for the foreseeable future in light of the ongoing shift toward cloud computing.