Home Popping the Amazon Web Services Capacity Myth

Popping the Amazon Web Services Capacity Myth

Amazon’s primary claim to fame is online retail – beginning with books, remember? – and the company has been very effective at growing that side of its business. So effective, in fact, that it’s easy to mistake the Amazon Web Services (AWS) cloud-based computing platform as little more than a way for Amazon to make use of excess computing capacity. That underestimates the resources that Amazon is putting into AWS, and the affect the company is having on the future of computing.

If that assumption were ever true, it’s now a long-obsolete concept. Amazon burned through its excess capacity very quickly. According to Andy Jassy, the guy who wrote the original business plan for AWS, “We’ve far exceeded the excess capacity of our internal system. That ship sailed 18 months ago.” That interview ran in Wired in April 2008, which means that Amazon had churned through its excess capacity by the end of 2006.

The excess capacity myth is something you hear in conversation occasionally, usually from folks who don’t follow cloud computing too closely. It probably has its roots in the early days of AWS, when Jeff Bezos himself said that AWS helps Amazon make use of under-utilized capacity. But that was just part of what Bezos had to say.

How Excess Capacity Led to AWS

What Amazon’s excess capacity really taught Amazon, says Bezos, wasn’t (just) that the company needed to use its own excess capacity. Instead, it taught the company that other companies have the same problem. Which meant that there was yet another market that Amazon could tap into, and it was already working on solving that problem for itself.

Werner Vogels, CTO at Amazon, addressed this on Quora some time ago:

At Amazon we had developed unique software and services based on more than a decade of infrastructure work for the evolution of the Amazon E-Commerce Platform. This was dedicated software and operation procedures that drove excellent performance, reliability, operational quality and security all at very large scale. At the same time we had seen that offering programmatic access to the Amazon Catalog and other ecommerce services was driving tremendous unexpected innovation by a very large developer ecosystem. The thinking then developed that offering Amazon’s expertise in ultra-scalable system software as primitive infrastructure building blocks delivered through a services interface could trigger whole new world of innovation as developers no longer needed to focus on buying, building and maintaining infrastructure.

All Evidence to the Contrary

Even if Amazon had kicked off AWS just to handle excess capacity, it’s clear that the service has far exceeded that role to become a big and important part of Amazon’s business.

Consider just some of the developments and expansions for AWS in the past few months:

None of these really address excess capacity, but all require an investment of developer time on Amazon’s part. If the company were looking only to let people tap into its excess capacity, it would not be spending quite so much time on developing new features.

Nor would the company need to be scaling out AWS quite so quickly. How quickly? According to a presentation from last year (PDF), Amazon adds “enough new capacity to support all of Amazon.com’s global infrastructure through the company’s first 5 years, when it was a $2.76B annual revenue enterprise” per day!

If anything, Amazon’s getting to the point of running its retail operation in the excess capacity of AWS, not the other way around.

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