Amazon Web Services (AWS) is a subsidiary of Amazon providing on-demand cloud computing platforms and APIs to individuals, companies, and governments, on a metered pay-as-you-go basis. These cloud computing web services provide a variety of basic abstract technical infrastructure and distributed computing building blocks and tools. One of these services is Amazon Elastic Compute Cloud (EC2), which allows users to have at their disposal a virtual cluster of computers, available all the time, through the Internet. AWS’s version of virtual computers emulates most of the attributes of a real computer, including hardware central processing units (CPUs) and graphics processing units (GPUs) for processing; local/RAM memory; hard-disk/SSD storage; a choice of operating systems; networking; and pre-loaded application software such as web servers, databases, and customer relationship management (CRM).
The AWS technology is implemented at server farms throughout the world, and maintained by the Amazon subsidiary. Fees are based on a combination of usage (known as a “Pay-as-you-go” model), hardware, operating system, software, or networking features chosen by the subscriber required availability, redundancy, security, and service options. Subscribers can pay for a single virtual AWS computer, a dedicated physical computer, or clusters of either. As part of the subscription agreement, Amazon provides security for subscribers’ systems. AWS operates from many global geographical regions including 6 in North America.
Amazon markets AWS to subscribers as a way of obtaining large scale computing capacity more quickly and cheaply than building an actual physical server farm. All services are billed based on usage, but each service measures usage in varying ways. As of 2017, AWS owns a dominant 33% of all cloud (IaaS, PaaS) while the next two competitors Microsoft and Google have 18%, 9% respectively according to Synergy Group.
As of 2020, AWS comprises more than 175 products and services including computing, storage, networking, database, analytics, application services, deployment, management, mobile, developer tools, and tools for the Internet of Things. The most popular include Amazon Elastic Compute Cloud (EC2), Amazon Simple Storage Service (Amazon S3), Amazon Connect, and AWS Lambda (a serverless function enabling serverless ETL e.g. between instances of EC2 & S3).
Most services are not exposed directly to end users, but instead offer functionality through APIs for developers to use in their applications. Amazon Web Services’ offerings are accessed over HTTP, using the REST architectural style and SOAP protocol for older APIs and exclusively JSON for newer ones.
The AWS platform was launched in July 2002. In its early stages, the platform consisted of only a few disparate tools and services. Then in late 2003, the AWS concept was publicly reformulated when Chris Pinkham and Benjamin Black presented a paper describing a vision for Amazon’s retail computing infrastructure that was completely standardized, completely automated, and would rely extensively on web services for services such as storage and would draw on internal work already underway. Near the end of their paper, they mentioned the possibility of selling access to virtual servers as a service, proposing the company could generate revenue from the new infrastructure investment. In November 2004, the first AWS service launched for public usage: Simple Queue Service (SQS). Thereafter Pinkham and lead developer Christopher Brown developed the Amazon EC2 service, with a team in Cape Town, South Africa.
Amazon Web Services was officially re-launched on March 14, 2006, combining the three initial service offerings of Amazon S3 cloud storage, SQS, and EC2. The AWS platform finally provided an integrated suite of core online services, as Chris Pinkham and Benjamin Black had proposed back in 2003, as a service offered to other developers, web sites, client-side applications, and companies. Andy Jassy, AWS founder and vice president in 2006, said at the time that Amazon S3 (one of the first and most scalable elements of AWS) “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. Amazon S3 enables developers to focus on innovating with data, rather than figuring out how to store it.”. In 2016 Jassy was promoted to CEO of the division. Reflecting the success of AWS, his annual compensation in 2017 hit nearly $36 million.
In 2014, AWS launched its partner network entitled APN (AWS Partner Network) which is focused on helping AWS-based companies grow and scale the success of their business with close collaboration and best practices.
To support industry-wide training and skills standardization, AWS began offering a certification program for computer engineers, on April 30, 2013, to highlight expertise in cloud computing.
In January 2015, Amazon Web Services acquired Annapurna Labs, an Israel-based microelectronics company reputedly for US$350-370M.
James Hamilton, an AWS engineer, wrote a retrospective article in 2016 to highlight the ten-year history of the online service from 2006 to 2016. As an early fan and outspoken proponent of the technology, he had joined the AWS engineering team in 2008.
In January 2018, Amazon launched an autoscaling service on AWS.
In November 2018, AWS announced customized ARM cores for use in its servers. Also in November 2018, AWS is developing ground stations to communicate with customer’s satellites.
In November 2010, it was reported that all of Amazon.com’s retail sites had migrated to AWS. Prior to 2012, AWS was considered a part of Amazon.com and so its revenue was not delineated in Amazon financial statements. In that year industry watchers for the first time estimated AWS revenue to be over $1.5 billion.
In April 2015, Amazon.com reported AWS was profitable, with sales of $1.57 billion in the first quarter of the year and $265 million of operating income. Founder Jeff Bezos described it as a fast-growing $5 billion business; analysts described it as “surprisingly more profitable than forecast”. In October, Amazon.com said in its Q3 earnings report that AWS’s operating income was $521 million, with operating margins at 25 percent. AWS’s 2015 Q3 revenue was $2.1 billion, a 78% increase from 2014’s Q3 revenue of $1.17 billion. 2015 Q4 revenue for the AWS segment increased 69.5% y/y to $2.4 billion with 28.5% operating margin, giving AWS a $9.6 billion run rate. In 2015, Gartner estimated that AWS customers are deploying 10x more infrastructure on AWS than the combined adoption of the next 14 providers.
In 2016 Q1, revenue was $2.57 billion with net income of $604 million, a 64% increase over 2015 Q1 that resulted in AWS being more profitable than Amazon’s North American retail business for the first time. In the first quarter of 2016, Amazon experienced a 42% rise in stock value as a result of increased earnings, of which AWS contributed 56% to corporate profits.
AWS had $17.46 billion in annual revenue in 2017. By end of 2018, the number had grown to $25.65 billion.
In 2019, AWS reported 37% yearly growth and accounted for 12% of Amazon’s revenue (up from 11% in 2018).
Notable customers include NASA, the Obama presidential campaign of 2012, and Netflix.
In 2019, it was reported that more than 80% of Germany’s listed DAX companies use AWS.
In August 2019, the U.S. Navy said it moved 72,000 users from six commands to an AWS cloud system as a first step toward pushing all of its data and analytics onto the cloud.
As of January 2021[update], AWS has distinct operations in 24 geographical “regions”: 7 in North America, 1 in South America, 6 in Europe, 1 in the Middle-East, 1 in Africa and 8 in Asia Pacific.
AWS has announced 6 new regions that will be coming online.
Each region is wholly contained within a single country and all of its data and services stay within the designated region. Each region has multiple “Availability Zones”, which consist of one or more discrete data centers, each with redundant power, networking and connectivity, housed in separate facilities. Availability Zones do not automatically provide additional scalability or redundancy within a region, since they are intentionally isolated from each other to prevent outages from spreading between Zones. Several services can operate across Availability Zones (e.g., S3, DynamoDB) while others can be configured to replicate across Zones to spread demand and avoid downtime from failures.
As of December 2014, Amazon Web Services operated an estimated 1.4 million servers across 28 availability zones. The global network of AWS Edge locations consists of 54 points of presence worldwide, including locations in the United States, Europe, Asia, Australia, and South America.
In 2014, AWS claimed its aim was to achieve 100% renewable energy usage in the future. In the United States, AWS’s partnerships with renewable energy providers include Community Energy of Virginia, to support the US East region; Pattern Development, in January 2015, to construct and operate Amazon Wind Farm Fowler Ridge; Iberdrola Renewables, LLC, in July 2015, to construct and operate Amazon Wind Farm US East; EDP Renewables North America, in November 2015, to construct and operate Amazon Wind Farm US Central; and Tesla Motors, to apply battery storage technology to address power needs in the US West (Northern California) region.
AWS also has “pop-up lofts” in different locations around the world. These market AWS to entrepreneurs and startups in different tech industries in a physical location. Visitors can work or relax inside the loft, or learn more about what they can do with AWS. In June 2014, AWS opened their first temporary pop-up loft in San Francisco. In May 2015 they expanded to New York City, and in September 2015 expanded to Berlin. AWS opened their fourth location, in Tel Aviv from March 1, 2016 to March 22, 2016. A pop-up loft was open in London from September 10 to October 29, 2015. The pop-up lofts in New York and San Francisco are indefinitely closed due to the COVID-19 pandemic while Tokyo has remained open in a limited capacity.
In 2017, AWS launched AWS re/Start in the United Kingdom to help young adults and military veterans retrain in technology-related skills. In partnership with the Prince’s Trust and the Ministry of Defence (MoD), AWS will help to provide re-training opportunities for young people from disadvantaged backgrounds and former military personnel. AWS is working alongside a number of partner companies including Cloudreach, Sage Group, EDF Energy and Tesco Bank.
In January 2021, AWS joined an industry pledge to achieve climate neutrality of datacentres by 2030, the Climate Neutral Data Centre Pact.