Amazon Web Services Secrets Revealed

Amazon.com exercises tight control over information related to its cloud computing business, a source of frustration to anyone trying to get a complete picture of Amazon Web Services. So I went in search of information from other sources. Here's what I found.First, Amazon does provide a few details about the size and scope of AWS. In a mid-year status report, the company said that "hundreds of thousands" of developers have registered for AWS and that the network bandwidth consumed by two AWS services - its Elastic Compute Cloud (EC2) and Simple Storage Service (S3) - now exceeds the bandwidth required for all of Amazon's global Web sites. It also disclosed that 52 billion objects are stored in S3 and that S3 requests regularly peak at 80,000 requests per second.

What can we learn from other sources? Guy Rosen, the founder of a cloud startup called InfiBase, analyzed data compiled by Quantcast and came to the conclusion that AWS growth is "dramatic." In a blog post, Rosen writes that, of the top 500,000 Web sites indexed by QuantCast, fewer than 1% (a mere .28%, to be precise) are hosted on Amazon's EC2. There are two takeaways from Rosen's analysis: One, that large Web sites are twice as likely as smaller sites to use EC2, an indication that cloud computing's benefits become more appealing the bigger you get. And two, EC2's saturation rate is miniscule, so there's lots of upside for growth.

Rosen plans to provide more data and analysis sometime soon around the growth rate of AWS. Here's a sneak peek: Rosen tells me that EC2 is experiencing monthly growth of "almost 10%." If accurate, that's huge growth, and it reinforces our general impression that cloud computing is out-pacing the rest of the IT industry. I've got a query into Amazon to check Rosen's estimate, but no response yet. Financial analysts should press Amazon for details on AWS revenues and growth during its upcoming conference call on results for the second quarter of the year.

Next, let's look at Amazon's data centers, another topic on which the company tends to be mum. According to Rich Miller at DataCenterKnowledge.com, Amazon recently leased a 110,000-square-foot data center in northern Virginia and it's constructing a new data center in Boardman, Oregon. Amazon has U.S. data centers in Dallas, Los Angeles, Miami, Newark, Palo Alto, Seattle, and St. Louis, and international data centers in Amsterdam, Dublin, Frankfurt, London, Hong Kong, and Tokyo.

Miller speculates that Amazon's northern Virginia data center will be used to support AWS customers in the federal government, and I'm sure that's right. Amazon recently held a two-day training session in Washington, D.C., for IT service firms that work with government agencies, and Amazon CTO Werner Vogels recently paid a visit to DARPA.

Some of the hardware going into those data centers are servers from Silicon Graphics International, formerly Rackable Systems. Miller reports that Amazon spent $86 million on Rackable equipment in 2008, a 54% increase over its spending with the hardware vendor the year before. Notably, some of Rackable's other large customers were curtailing spending on new servers as Amazon was accelerating its spending.

It's not clear how much Amazon spends on resiliency and redundancy, but we do know that AWS has experienced two outages in the last six weeks, one caused by a lightning strike on June 11, the other an hour-long glitch on July 19 that affected a half-dozen of its services.

As I've said before, Amazon doesn't break out financial details for AWS. AWS sales are lumped into a non-retail category called "other," which includes Amazon Enterprise Solutions, miscellaneous marketing and promotional activities, and co-branded credit cards. In the first quarter of 2009, Amazon's "other" revenues totaled $120 million, an 8% increase over the first quarter of 2008.

On a quarter-to-quarter basis, however, Amazon's "other" revenues in 1Q 2009 plummeted 31% from 4Q 2008, dropping from $175 million to $120 million. It's impossible to know whether AWS revenues grew or shrank during that period because the numbers are embedded (obscured) within the "other" category. Amazon's second quarter financial results are due any day. It will be interesting to see if the company coughs up any new information.