Amazon recently announced the availability of its Utility computing service EC2 (Elastic Compute Cloud). Using this service users can provision computing power from Amazon on a usage based pricing.
Currently you can provision this service in the measures of server instances, where one instance is equal to 1.7Ghz Xeon CPU, 1.75GB of RAM, 160GB of local disk(10 cents per instance hour - approximately $72 per month), and 250Mb/s of network bandwidth. Users can provision additional storage and bandwidth based on the requirement (20 cents per GB of bandwidth and 15 cents per GB of storage). You can scale your instance power on-demand by making just a few webservices calls from your application. So the infrastructure is scalable on-demand and is also highly available.
With this service, the world is wide open now for innovators in the Web 2.0 space. There is no need for entrepreneurs to incur any capital expenditure and can start building and offering new services at a highly predictable monthly cost.
Also, there are some new business opportunities that are available around this, the current architecture of EC2 doesn't have enterprise class capabilities like support for clustering, Grid and so on, in near future we can see some solutions built either by Amazon or other vendors. Also, there could be some new type of service providers who could provide pre-built images of some enterprise applications with associated support and management services. An example of this could be - A Hosted Application management provider adopting an open source enterprise application like Sugar CRM, host the image in EC2 and providing it on a subscription based model to end customers - A cool integration between SaaS and Open source. There is a huge long-tail opportunity here.
The service is still in limited Beta and we still don't know when Amazon will launch the service officially. Even though there has been similar services available today from vendors like Sun, this service differentiates itself through its simple to use webservices based approach and also the ability to pay separately for additional storage and bandwidth needs.
Technorati tags: SaaS, Software as a Service, Amazon's EC2, Open Source, Web 2.0
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