By making a handful of Web services applications open to outsiders, Amazon.com is building additional sources of revenue while creating computing models for the future, the CEO said at MIT's ongoing Emerging Technologies Conference.
CAMBRIDGE, Mass.—Amazon.coms far-ranging online retail business will continue to serve as its primary money-maker for the foreseeable future, but a collection of Web services applications piggybacked on the infrastructure supporting its consumer sales will become a growing source of income and technical development expertise in years to come, according to Jeff Bezos, the firms founder and chief executive.
Speaking to attendees of the annual Emerging Technology Conference being held here at the Massachusetts Institute of Technology on Sept. 27 and 28, Bezos outlined a handful of Web services applications launched by the online retailer in the name of exposing the capabilities of its massive IT infrastructure for new purposes.
The executive maintains that using the scale and processing power of the firms back-end operations to create Web services tools that Amazon can market to a new class of customers will lend additional revenue and valuable programming experience to the retailers business as it moves forward.
In addition to providing Amazon.com with new sales opportunities and Web services development experience, the Web 2.0 systems already launched by the company are providing new methods for other businesses to tap into the sizable infrastructure built by the company to advance their own operations.
For instance, Amazon S3, an online storage application designed to make enterprise-scale memory and processing power available to anyone, at a rate of 15 cents per month for a gigabit of memory, will allow smaller software developers building products for enterprise use to get real-world testing data without needing to invest in the infrastructure needed to do so.
In another example of using S3, online photo site Smugmug.com is already using the service to host images saved by its members.
Without the availability of the low-cost alternative, it would be much harder for the site to compete with larger ventures, Bezos contends.
Just as the Google Maps Web services interface published by the search giant has allowed Googles software code and server farms to become a supporting technology to the many sites built using the tools, Seattle-based Amazon.com could someday support another range of businesses, the CEO said. The firm has already lured 200,000 registered developers to sign up for its programs.
"The idea of using infrastructure Web services to remove costs for other businesses is something thats already being accomplished by efforts like S3," said Bezos.
"Our goal is to build services that are incredibly easy for developers to use and also very reliable, that can return results rapidly at a low cost, and allow users to pay by the drink."
Another Web service being offered publicly by Amazon is its Mechanical Turk initiative, which allows users to create "human intelligence tasks," or HITs, that can be completed by other people for a very small fee, typically of several cents.
Click here to read more about Amazons storage service for developers.
For jobs that are particularly challenging for computers, such as comparing the contents of several photos, the service will allow developers to find human workers to help them complete their programming projects.
For instance, Amazon.com used the application to help recruit people to find repetitive information in its online consumer product descriptions.
In a non-Web services example that could scare the likes of worldwide shippers like FedEx and United Parcel Service, and local rental storage providers, Amazon has created another service build off of its distribution operations that will allow users to ship hard goods to the company, have the items stored in a warehouse, and then shipped wherever they want, for a fee.
As with the Web services initiatives, the effort, dubbed Fulfill By Amazon, illustrates how businesses should be looking at news ways to capitalize the infrastructures they already control, Bezos said.
"Using Amazons Web services, traditional foundation-level services are being unlocked in a new kind of business model," said Bezos.
"When you reduce the cost of heavy lifting and ease the costs of infrastructure, the inevitable result of that is that youre eliminating fixed costs and lower the minimum scale at which [businesses] can operate."
Its not so much that this effort has anything to do with selling books, its the inverse; we hope Amazon Web services can empower developers with whole new Web-scale applications development capabilities, and in turn make us a more profitable business," he said.
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