How Amazon Got Into The Cloud Computing Business


The need for a reliable infrastructure for the development of web-based applications was the catalyst for Amazon’s entry into the cloud computing business. While the infrastructure in place for Amazon’s E-Commerce platform was reliable and providing optimal performance, the efficiency and innovation that stemmed from providing programmatic access to some of Amazon’s ecommerce services paved the way for a new approach taken by Amazon.


The need for a shift in infrastructure was felt when Amazon’s application developers struggled to work efficiently within the existing IT infrastructure. The innovative mindset of Amazon allowed it to work on a solution to provide a web infrastructure that enabled its app developers to work more efficiently and diligently. When Amazon set out to build an internal infrastructure for their developers, they realised that any developer looking to build web-based applications would require the IT infrastructure Amazon was developing for its own use. The possibility of Amazon monetising their web infrastructure on a large scale was a very real one, especially considering that cloud computing was already being recognised as a future web development platform in the computing industry.

Lead the Change

As one of the first major companies to enter the cloud computing paradigm, Amazon took a successful leap of faith into the world of cloud computing. Contrary to some people’s belief, Amazon’s entry into the cloud computing business was not driven by margins; rather, it was a seized opportunity to improve the services and products provided by Amazon. The link between Amazon’s digital content and the need for a new IT infrastructure was very evident as cloud computing became increasingly important for digital content providers. It was an opportunity for Amazon to implement its own technology by developing an IT infrastructure not only for internal use but for distribution on a wider scale.

Amazon’s entry into the cloud computing business was also based on a vision from Jeff Bezos, who believed that building an online store would allow Amazon to expand its business and gain customers by not being limited by the barriers posed in a physical business. By developing an online store, Amazon could benefit from the advantages offered by the internet and better cater for the needs of its customers. Jeff Bezos realised that digital computing would allow Amazon to provide an unbounded service that would be customer friendly, low cost and one that would enable Amazon to produce bigger margins. The advantages of Amazon branching into the digital computing industry are clearly evident today in the services and products they provide. For instance, in fifteen years, Amazon has gone from providing one category of books to over sixteen main categories.

The cost savings and improved efficiency provided by Amazon’s expertise in the IT infrastructure they developed encouraged Amazon to distribute their cloud computing service on a mass scale. It was one of the first companies to provide one click ordering and has since become an established web services provider. Amazon determined that the services they could provide would reduce costs by over 30% and improve the compute utilisation of IT infrastructure on a corporate scale. As such, Amazon Web Services (AWS) launched the first digital storage service in 2006 and has progressively gained an immense amount of popularity.

Amazon’s success in the cloud computing business is based on its dedication in providing digital services without introducing radical changes and keeping its customers satisfied. Amazon’s CEO, Jeff Bezos, follows a simple philosophy — provide consumers with products and services in a low cost and user friendly manner. Amazon is one of the few companies in the cloud computing business to be providing their services with a low margin. Amazon’s emphasis is firmly on providing customers with low cost services and providing them with excellent customer service. By maintaining this simple philosophy, Amazon has become one of the main cloud service providers in the cloud computing business today.

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